Bernacke Corp. is instituting an activity-based costing project in its tenperson purchasing department. Annual departmental overhead costs are $731,250. Because finding the best supplier takes the majority of effort in the department, most of the costs are allocated to this activity area. Many purchase orders are received in a single shipment.
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A What amount of purchasing department cost should be assigned to this product?
B If 100 units of the product are manufactured during the year, what is the purchasing department cost per unit? Round your answer to the nearest cent.
C If purchasing department costs had been allocated using telephone calls as the allocation base, how much cost would have been assigned to this product? Round your answer to the nearest cent