Product and Cost Information: Total marketing costs $ 42,250 Total engineering costs $ 96,000 Total setup costs $ 54,450 Labor cost per hour $ 30 Potential Drivers for Indirect Costs: Activity Produ X Product Y Total TV Ads 4 1 5 Engineering Cycles 16 4 20 Batched Runs 6 3 9 Total budgeted indirect costs = Marketing costs are allocated based on the number of TV ads . Product X requires more marketing than Product Y Engineering costs are allocated based on the number of development cycles . More engineering costs are allocated to Product X than Product Y Setup costs are allocated based on the number of batch runs . Product X requires more set up costs than Product Y Before going any further, it makes sense that if indirect costs are allocated using activitybased costing, more indirect costs are allocated to Product X than to Product V Allocation of Indirect Costs: Onoe overhead costs are estimated and related activities are determined, the next step is to calculate the rates to be used to allocate cnsls. The formula for calculating the overhead rate is: Estimated overhead cost Overhead rate Direct labor cost Using marketing cosls as an example: The marketing cost perTV ad is . or D perTV ad 1:] was This rate is applied to the number of activities (in this case, TV ads) associated with each product. Product X requires 4 TV ads at the planned level of productiun and ProductY requires 1 TV ad when l number of units are produced. Fill in the table showing how the indirect costs are allocated to Product X and product V at the planned level of production. Il:l-I--I-|:II- - - Tubal Product Cost: Assume the company plans to produce 500 units of Product X and 500 units of Product Y. At this level of production, what are the total indirect, direct and product costs for Product X and Y. Compute the cost per unit for the total product cost. Round the per unit cost to the nearest dollar. Product X Product V Total Indirect Costs Total Labor Costs Total Product Cost Product Cost Per Unit