Petal Bags (PB) is a designer of high-quality backpacks and purses. Each design is made in small batches. Each spring, PB comes out with new designs for the backpack and for the purse. The company uses these designs for a year and then moves on to the next trend. The bags are all made on the same fabrication equipment that is 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, with the number of shipments. Budgeted information for the year is as follows: 1. Identify the cost hierarchy level for each cost category. 2. Identify the most appropriate cost driver for each cost category. Explain briefly your choice of cost driver. 3. Calculate the budgeted cost per unit of cost driver for each cost category. 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. For the Year Ended February 28, 2014 $ 396,000 442,500 Direct materials-purses Direct materials-backpacks Direct manufacturing labor-purses Direct manufacturing laborbackpacks 115,200 115,050 163,280 Setup Shipping 74,880 Design 169,000 216,000 Plant utilities and administration $ 1,691,910 Purses Total Total Other budget information follows: Backpacks Number of bags 5,900 Hours of production 1,425 Number of batches 158 3,600 9,500 2,575 4,000 50 208 Number of designs 2 2 4