2:57 PM Z1 '9' '25: (E 7270 A0211 Man Acc Assessm...t 2 Instructions Ti 2021 e .f/OIEHQ ACZI 1 Management Accounting 7 Assessment 2 QUESTION 5 Acryrbased Costing (40 marks) Page 3 of5 Pastel Bags (PB) is a designer of high-quality backpacks and purses. Each design is made in small batches. Each spring, PB comes out with new designs for the backpack and for the purse. The company uses these designs for a year and then moves on to the next trend. The bags are all made on the same fabrication equipment that is expected to operate at capacity. The equipment must be switched over to a new design and set-up to prepare for the production of each new batch of products. When completed, each batch of products is immediately shipped to a wholesaler. Shipping costs vary with the number of shipments. Budgeted information for the next financial year is: Pastel Bags: budgeted costs and activities Direct materialspurses Direct materialsbackpacks Direct production mtgpurses Direct production lambackpacks Set-up Shipping Design Plant utilities and administration Total Other budget information follows: Backpacks Purses Number of bags 6175 3 075 Hours of productio 1 565 2 535 Number of batches 120 30 Number of designs 2 2 Required $319 155 454 995 99 000 113 000 64 000 73 000 169 000 221 000 m E Total 9 250 4 250 200 Prepare a report of the budgeted total costs and cost per unit for each product line using the ABC system for presentation to management. In the report: (1) identify the activitycost drivers that you have selected and the related level in the hierarchy of activities. together with an explanation; (2) recommend to managers how they could use the information to reduce costs. ACZI 1 Management Accounting 7 Assessment 2 QUESTION 6 Cost Volume Proti Sales Mix (20 marks) Page 4 of5 The Kenosha Company has three product lines of beer mugsiA, B and Ciwith contribution margins of $5, $4 and $3, respectively. The chief executive officer foresees sales of 175 000 units in the coming period, consisting onS 000 units of A, 100 000 units ofB and 50 000 units of C. The company's xed costs for the period are $351 000. Required 1 \"fine in flu: rnmnnn'r'u kaalr avian nm'm in Haifa auunminn' +lu+ rim: nixnurl \"In miv d5