Laserprint Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Laserprint classifies its various printing jobs as standard jobs or special jobs. (Click the icon to view additional information.) To see how activity-based costing would affect the costs of standard and special jobs, Laserprint collects the following information for the fiscal year 2017 that just ended. (Click the icon to view the information.) Read the requirements. i x ing system. (Round interim calculations to three decimal places, X.XXX and your final More Info Laserprint's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Laserprint operates at capacity and allocates all indirect costs using printing machine-hours as the allocation base. Laserprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Laserprint's ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect-cost pool there would now be six categories for assigning indirect costs: design, purchasing, setup, printing machine operations, marketing, and administration. ed costing system. Dollar, DM = Direct manufacturing, Qty. = Quantity. Round the allocation rates to the es, X.XXXXX.) Print Done ARO Allanotion roto Data Table 1 Standard Job Special Job Cause and Cheti METALIONISTI Deweet AluCALOm Base and Activity Cost Total 2 Number of printing jobs 1,200 600 3 Price per job $ 1,600 $ 1.800 $ 250 $ 310 4 Cost of supplies per job 5 Direct labor costs per job $ 140 $ 180 6 Printing machine-hours per job 10 10 Indirect costs of operating printing machines 486,000 increase with printing machine-hours $ 7 9 7 Cost of printing machine operations 8 Setup-hours per job 9 Setup costs 10 Total number of purchase orders $ 414,000 Indirect setup costs increase with setup-hours 340 11 Purchase order costs 440 Indirect purchase order costs increase with number $ 27,300 of purchase orders Design costs are allocated to standard and special jobs based on a special study of the design 22,000 $ 32,000 department 4% $ 120,000 Demand for administrative resources increases with $ 138.000l direct labor costs 10,000 $ 12 Design costs 13 Marketing costs as a percentage of revenues 4% 14 Administration costs Print Done Requirement 1. Calculate the cost of a standard job and a special job under the simple costing system. (Round interim calculations to three decimal places, X.XXX and your final answers to the nearest cent, X.XX.) Standard Special Job Job 250 310 140 180 Simple Costing System Cost of supplies per job Direct manufacturing labor cost per job lar Indirect cost allocated to each job f Total costs Requirement 2. Calculate the cost of a standard job and a special job under the activity-based costing system. Begin by calculating the allocation rates for the following activities. (Abbreviations used: $ = Dollar, DM = Direct manufacturing, Qty. = Quantity. Round the allocation rates to the nearest cent for all activities except Administration; round Administration to five decimal places, X.XXXXX.) Total cost of activity Total qty consumed = ABC Allocation rate per machine-hour Machine operations 486000 1800 Setups 414000 per setup-hour : : Purchase orders 27300 per purchase order Administration 138000 : per $ of DM labor cost Now, completing the table for total costs of standard jobs, special jobs and then cost per job for each type of job. (Round your answers to the nearest whole dollar except cost per job. Round cost per job to the neares Standard Special Job Job ABC Costing System Cost of supplies lar Direct manufacturing labor costs f Indirect costs allocated: Machine operations Setups Purchase orders Design Marketing Administration Total costs Cost of each job Requirement 3. Compare the costs of a standard job and a special job in requirements 1 and 2. Why do the simple and activity-based costing systems differ in the cost of a standard job and a special job? Standard jobs cost under the simple costing system than under the activity-based costing system. Special jobs cost under the simple costing sytem than under the activity-based costing system. Relative to the ABC system, the simple costing system standard jobs and special jobs. Requirement 4. How might Laserprint use the new cost information from its activity-based costing system to better manage its business? A. Under the simple system, Laserprint was making a gross margin of 33% on each standard job and 35% on each special job. But, the ABC system reveals that it is actually making a gross margin of about 36% on each standard job and about 30% on each special job. Depending on the market competitiveness, Laserprint may either want to reprice the different types of jobs, or, it may choose to market standard jobs more aggressively than before. OB. Under the simple system, Laserprint was making a gross margin of 35% on each standard job and 33% on each special job. But, the ABC system reveals that it is actually making a gross margin of about 30% on each standard job and about 36% on each special job. Depending on the market competitiveness, Laserprint may either want to reprice the different types of jobs, or, it may choose to market special jobs more aggressively than before. O c. Under the simple system, Laserprint was making a gross margin of 33% on each standard job and 35% on each special job. But, the ABC system reveals that it is actually making a gross margin of about 36% on each standard job and about 30% on each special job. Depending on the market competitiveness, Laserprint may either want to reprice the different types of jobs, or, it may choose to market special jobs more aggressively than before. OD. None of the above. The new cost information would have no impact on how the company manages its business