10. The Southwest Leather Company manufactures leather handbags (H) and moccasins (M). The company has been using the factory overhead rate method but has decided to evaluate the activity based costing to allocate factory overhead. The factory overhead estimated per unit together with direct materials and direct labor will help determine selling prices. (10 points) Total Budgeted factory overhead cost = $360,000 Products Cutting Sewing Set-Ups QC Purchase Inspections Orders Handbags 60,000 dlh 60,000 dlh 500 200 100 Moccasins 40,000 dlh 80,000 dlh 300 800 300 Total 100,000 dlh 140,000 dlh 800 set-ups 1,000 inspect 400 PO's Budget $40,000 $210,000 580,000 $20,000 $10,000