Activity-based costing and product cost distortion Crenshaw Inc. is considering a change to activity-based product costing. The company produces two products, cell phones and tablet PCs, In a single production department. The production department is estimated to require 4,000 direct labor hours. The total indirect labor is budgeted to be $480,000. Time records from indirect labor employees revealed that they spent 60% of their time setting up production runs and 40% of their time supporting actual production. The following information about cell phones and tablet PCs was determined from the corporate records: Number of Setups Direct Labor Hours Units Cell phones Tablet PCs 1,600 2,000 80,000 800 2,000 80,000 Total 2,400 4,000 160,000 If required, round your answers to the nearest cent. a. Determine the indirect labor cost per unit allocated to cell phones and tablet PCs under a single plantwide factory overhead rate system using the direct labor hours as the allocation base. Cell phones s Tablet PCs per unit per unit b. Determine the budgeted activity costs and activity rates for the indirect labor under activity-based costing. Assume two activities-one for setup and the other for production support. 2:12 PM