The wireless phone manufacturing division of a consumer electronics company uses activity-based costing. For simplicity, assume that its accountants have identified only the following three activities and related cost drivers for indirect production costs: (Click the icon to view the activities and cost drivers.) Three types of cell phones are produced: Senior, Basic, and Deluxe. Direct costs and cost-driver activity for each product for a recent month are as follows: (Click the icon to view the costs and activity.) Indirect production costs for the month were as follows: (Click the icon to view the indirect production costs.) Read the requirements. Requirement 1. Compute the indirect production costs allocated to each product with the ABC system. Determine the formula, then compute the indirect cost rates for materials handling, engineering and power costs. (Round the rates to two decimal places, XX.) Indirect production cost/Cost allocation base Materials handling Requirements 147400 Indirect cost allocation rate per direct material dollar Data table 1. Compute the indirect production costs allocated to each product with the ABC system. 2. Suppose all indirect production costs had been allocated to products in proportion to their direct-labor costs. Compute the indirect production costs allocated to each product. 3. In which product costs, those in requirement 1 or those in requirement 2, do you have the most confidence? Why? Materials handling Engineering 15,400 100,000 32,000 147,400 Total indirect production cost Power More info Activity Materials handling Engineering Power Print Done - Data table Print Done Senior Basic Deluxe Cost Driver Direct-materials cost Direct-materials cost $ 50,000 $ 80,000 $ 90,000 Direct-labor cost $ 13,266 $ 10,318 $ Engineering change notices Kilowatt hours 190,000 150,000 5,896 60,000 Kilowatt hours Engineering change notices 9 4 87 Print Done Print Done - X - X