Activity-Based Costing and Product Cost Distortion Handbrain 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 2,000 direct labor hours. The total indirect labor is budgeted to be $200,000. Time records from indirect labor employees revealed that they spent 30% of their time setting up production runs and 70% of their time supporting actual production. The following information about cell phones and tablet PCs was determined from the corporate records: If required, round all per unit 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 rato system using the direct labor hours as the allocation base. b. Determine the budgeted activity costs and activity nates for the indirect labor under activity-based costing. Assume two activities one for setup and the other for production support. c. Determine the activity cost per unit for indirect labor allocated to each product under activity-based costing. cell phones per unit Tablet PCs \$ per unit d. Why are the per-unit allocated costs in (a) different from the per-unit actwity cost asslgned 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 coating method properly silocates the setup-related activity so that the recelve a targer portion of the setup activity cost. The allocstes overhead only on the basis of direct labor hours. since the direct labor hours equal for each product, the allocated indirect labor will also ecual