I need help with 4 and 5 of question 5-37. If you have time to do all of the answers that would be great to check myself and see if I am doing them right.

Please give a little explanation of your calculations if you can so I know I am on the right track. Thank you for all your help.

Elizabeth.

5-37 choosing cost drivers, activity-based costing, activity-based management. Bags (PB) is a designer of high-quality backpacks and purses. Each design is Pastel PB comes out with new designs for the made in small batches. Each spring, moves backpack and for the purse. The company uses these designs for a year and then on to the next trend. The bags are all made on the same fabrication equipment thatis 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 withthe number of shipments. Budgeted information for the year is as follows: Pastel Bags Budget for Costs and Activities For the Year Ended February 28, 2014 Direct materials-purses S 319,155 Direct materials-backpacks 454,995 Direct manufacturing labor-purses 99,000 Direct manufacturing labor-backpacks 113000 Setup Shipping 73,000 169,000 Design Plant utilities and administration Total $1,513,150 Other budget information follows: Backpacks Purses Total 3,075 9,250 Number of bags 6,175 2,585 4,250 Hours of production 1,665 Number of batches Number of designs 1. Identify the cost hierarchy level for each cost category. cost 2 Identify the most appropriate cost driver for each cost category. Explain briefly your choice of 3 driver for each cost category Calculate the budgeted cost per unit of cost driver 4 Calculate the budgeted total costs and cost per unit for each product line. 5. Explain how you could use the information in requirement 4 to reduce costs