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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
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, which 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: EEB (Click the icon to view the budgeted information.) Read the requirements Requirement 1. ldentify the cost hierarchy level for each cost category. Cost Cost Hierarchy Level Direct materials purses and backpacks Direct manufacturing labor-purses and backpacks Setup Shipping Design Plant utilities and administration Data Table Direct materials-purses Direct materials - backpacks Direct manufacturing labor - purses Direct manufacturing labor - backpacks Setup Shipping Design Plant utilities and administration Total $279,065 444,220 102,000 121,000 64,545 71,370 170,000 249,000 $ 1,501,200 Other budget information follows: Backpacks Purses Total Number of bags Hours of production Number of batches Number of designs 6,150 1,555 140 2 9,200 4,150 195 5 3,050 2,595 Print Done
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