U DO OHIO Pumpkin 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: .: (Click the icon to view the budgeted information.) Read the requirements. i Data Table Requirement 1. Identify the cost hierarchy level for each cost categ Cost Cost Hierarchy Level A Requirements Direct materialspurses Direct materials-backpacks Pumpkin Bags Budget for Costs and Activities For the Year Ended February 28, 2014 Direct labor-purses Direct labor-backpacks Setup Shipping Design Plant utilities and administration Direct materials-purses Direct materialsbackpacks Direct manufacturing labor-purses Direct manufacturing labor-backpacks Setup Shipping 393,750 466,200 94,500 119,700 21,420 70,980 163,000 208,000 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. Print Done Design Plant utilities and administration $ 1,537,550 Total Total Other budget information follows: Backpacks Number of bags 6,300 Hours of production 1,525 Number of batches R 135 Number of designs 3 Purses 3,150 2,635 75 2 9,450 4,160 210 5 Print Print Done Done Choose from any drop-down list and then click Check Answer. U DO OHIO Pumpkin 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: .: (Click the icon to view the budgeted information.) Read the requirements. i Data Table Requirement 1. Identify the cost hierarchy level for each cost categ Cost Cost Hierarchy Level A Requirements Direct materialspurses Direct materials-backpacks Pumpkin Bags Budget for Costs and Activities For the Year Ended February 28, 2014 Direct labor-purses Direct labor-backpacks Setup Shipping Design Plant utilities and administration Direct materials-purses Direct materialsbackpacks Direct manufacturing labor-purses Direct manufacturing labor-backpacks Setup Shipping 393,750 466,200 94,500 119,700 21,420 70,980 163,000 208,000 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. Print Done Design Plant utilities and administration $ 1,537,550 Total Total Other budget information follows: Backpacks Number of bags 6,300 Hours of production 1,525 Number of batches R 135 Number of designs 3 Purses 3,150 2,635 75 2 9,450 4,160 210 5 Print Print Done Done Choose from any drop-down list and then click Check
