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Saratoga Company manufactures jobs to customer specifications. The company is conducting a time-driven activity-based costing study in its Purchasing Department to better understand how Purchasing

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Saratoga Company manufactures jobs to customer specifications. The company is conducting a time-driven activity-based costing study in its Purchasing Department to better understand how Purchasing Department labor costs are consumed by individual jobs. To aid the study, the company provided the following data regarding its Purchasing Department and three of its many jobs Namber of employees Average salary per employee Weeks of employment per year Hours worked per week Practical capacity percentage 20 $ 23,000 52 40 958 Requisition Processing 15 Bid Evaluation 45 Minute per unit of the activity Inspection 30 Job 8 Job Y 5 Jobz 4 Number of requisition processed Number of bid evaluation Bamber of inspections Now assume that Saratoga Company would like to answer the following "what if" question using its time-driven activity based costing system: Assuming our estimated activity demands for all jobs in the next period will be as shown below, how will this affect our job costs and our staffing levels within the Purchasing Department? Requisition Bid Processing Evaluation Inspection 16.100 19,150 21,500 Activity demands for all jobs Required: 1. Will the revised activity demands affect the total Purchasing Department labor costs assigned to Job X, Job Y, and Job Z? 2. Using the revised activity demands, calculate Saratoga's used capacity in minutes. 3. Using the revised activity demands, calculate Saratoga's unused capacity in minutes. 4. Using the revised activity demands, calculate Saratoga's unused capacity in number of employees. (Round your answer to 2 decimal places.) 5. Based on the revised activity demands, calculate the impact on expenses of matching capacity with demand. (Be sure to round down your potential adjustment in the number of employees to a whole number. Negative amount should be indicated by a minus sign.) 1 2 3 Revised activity demands affect total Purchasing Department labor costs assigned to Jobs X. Y and Z? Used capacity in minutes Unused capacity in minutes Unused capacity in number of employees Impact on expenses of matching capacity with demand 5

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