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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
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: $ 20,500 Number of employees Average salary per employee Weeks of employment per year Hours worked per week Practical capacity percentage 52 40 85% Requisition Processing Bid Evaluation 45 Inspection Minutes per unit of the activity 30 Job x Job Y Job Z Number of requisitions processed Number of bid evaluations Number of inspections mo +++ COU 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 Processing 20,600 Bid Evaluation 22,900 Activity demands for all jobs Inspection 27,000 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: $ 20,500 Number of employees Average salary per employee Weeks of employment per year Hours worked per week Practical capacity percentage 52 40 85% Requisition Processing Bid Evaluation 45 Inspection Minutes per unit of the activity 30 Job x Job Y Job Z Number of requisitions processed Number of bid evaluations Number of inspections mo +++ COU 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 Processing 20,600 Bid Evaluation 22,900 Activity demands for all jobs Inspection 27,000
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