Pippin Bags (PB) is a designer of high-quality backpacks and purses. Each design is made in smal 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 samne fabrication equipment, which is expected to operate al 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: (Click the icon to view the budgeted information.) Read the requirements Data table Requirement 1. Identify the cost hierarchy level for each cost category Cost Cast Hierarchy Level Direct materials-ourses and backpacks Direct manufacturing labor-purses and backpacks Setup Shipping Design Plant utilities and administration Pippin Bags Budget for Costs and Activities for the Year Ended February 28, 201 Direct materials - purses - $ 401,225 Direct materials - backpacks 469,875 Direct manufacturing labor - purses 97,000 Direct manufacturing labor - backpacks 117,000 Setup 65,000 Shipping 72,400 Design 170,000 Plant utilities and administration 225,500 Total $ 1.618,000 1 Other budget information follows: Total Backpacks 5.900 - X Requirements Purses 3,600 2,550 75 9,500 4100 Number of bags Hours of production Number of batches Number of designs 1,550 125 200 2 3 5 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 total 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. Print Done Help me solve this Video Get more help