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Please show work in Excel :) Delano Incorporated would like to institute an activity-based costing system to price products. The company's Purchasing Department incurs costs
Please show work in Excel :)
Delano Incorporated would like to institute an activity-based costing system to price products. The company's Purchasing Department incurs costs of $620,000 per year and has 10 employees. Purchasing has determined the three major activities that occur during the year. During the year. 50,000 phone calls were made in the purchasing department: 15,000 purchase orders were issued: and 10,000 shipments were received. Product A required 200 phone calls. 150 receiving reports, and 50 purchase orders. Product B required 350 phone calls. 400 receiving reports, and 100 purchase orders (There were other products produced not mentioned here in this problem.) a. Calculate the allocation rates for: Issuing purchase orders: Cost per purchase order = ? Reviewing receiving reports: Cost per receiving report = ? Making phone calls Cost per phone call = ? b. Using ABC costing with the allocation rates calculated in part a), determine the amount of Purchasing Department cost that should be assigned to Product A and to Product B. c. Determine cost per unit if 890 units of Product A and 500 units of Product B were manufactured during the yearStep by Step Solution
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