Activity-Based Costing and Product Cost Distortion Digital Storage Concept Inc. is considering a change to activity-based product conting. The company produces two products, cell phones and tablet Pox, in a single production department. The production department is estimated to require 4,000 direct labor hours. The total indirect laboris budgeted to be 3652,800. Time records from Indirect labor employees revealed that they spent 40% of their time setting up production runs and 60% of their time supporting actual production The following information about cell phones and tablet PCs was determined from the corporate records Direct Units Number of Setups 500 Labor Hours Cell phones 2,000 Tablet PCs 1,100 2,000 96,000 96,000 192,000 Total 1,600 4,000 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 lobor hours the allocation base. Cell phones per unit Tablet PCs per unit b. Determine the budgeted activity costs and activity rates for the Indirect labor under activity-based costing, Anaume two activities--one for setup and the other for production support Budgeted Activity Cont Activity Rate Setup per setup Production support per direct labor hour c. Determine the activity cost per unit for indirect labor located to each product under activity based conting per unit Cell phones per unit Tablet PCs d. Why are the per-unit alocated costs in (a) different from the per-unit activity cost assigned to the products in (c? The per-unit indirect labor costs in (a) are distorted because is consumed by the products in a different ratio from the direct labor. The costing method results the product with the number of setups receiving a larger portion of the setup activity cost. The allocates overhead only on the basis of direct labor hours. Since the direct labor hours equal for each product, the allocated indirect labor will also equal