P7-31. Budgeted Service Department Cost Allocation: Pricing a New Product Fit & Active Company is adding a new diet food concentrate called Body Fit & Healthy to its line of bodybuilding and exercise products. A plant is being built for manufacturing the new product. Man agement has decided to price the new product based on a 100 percent markup on total manufacturing costs. A direct cost budget for the new plant projects that direct department costs of S6,500,000 will be incurred in producing an expected normal output of 700,000 pounds of finished product. In addition, indirect costs for Administration and Technical Support will be shared by Body Fit & Healthy with the two exercise products divisions, Commercial Products and Retail Products. Budgeted annual data to be used in making the allocations are summarized here LO2 Body Fit & Technical Commercial Retail Administration Support Products Products Healthy Number of employees Amount of technical 50 30 20 . support time (hours). . . . 500 1,500 1,250 750 Direct costs are budgeted at $410,000 for the Administration Department and $560,000 for the Techni cal Support Department. Required a. Using the step method, determine the total direct and indirect costs of Body Fit & Healthy b. Determine the selling price per pound of Body Fit & Healthy. (Round calculations to the nearest cent.)