PROBLEM #4. ACTIVITY-BASED COSTING (50 POINTS) To price products, Odette Company would like to use an activity-based pricing system. The Purchasing Department of the corporation spends 27,500,000 each year and employs six people. The three key actions that occur during the year have been established by purchasing. Allocation # of Total Activity Measure People Cost Purchase orders issuance # of purchase 2 7,500,000 orders Review of receiving # of receiving 8,750,000 reports reports Making Phone calls # of phone calls 6 11,250,000 The department received 100,000 phone calls, issued 30,000 purchase orders, and received 20,000 shipments during the year. A total of 400 phone calls, 300 receiving reports, and 100 purchase orders were necessary for Product X. 700 phone calls, 800 receiving reports, and 200 purchase orders were necessary for Product Y. a. Determine the amount of purchasing department cost that should be assigned to each of these products. b. Determine purchasing department cost per unit if 3,000 units of Product x and 6,000 units of Product y were manufactured during the year. How will the company be benefited if they institute Activity Based Costing