%x P5-38 (similar to) Question Help 0 Peach 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 Data Table - X Requirement 1. Identify the cost hierarchy level for each cost category. Cost Cost Hierarchy Level Direct materials-purses Output unit-level cost Peach Bags Direct materials-backpacks Output unit-level cost Budget for Costs and Activities Direct labor-purses Output unit-level cost For the Year Ended February 28, 2014 Autout unit local cost Direct materials-purses $ 323,200 A Requirements - X Direct materials-backpacks 456,000 Direct manufacturing labor-purses 102,400 Direct manufacturing labor-backpacks 99,000 1. Identify the cost hierarchy level for each cost category. Setup 17,000 2. Identify the most appropriate cost driver for each cost category. Explain briefly your choice of cost driver. Shipping 73,000 3. Calculate the budgeted cost per unit of cost driver for each cost category. Design 166,000 4. Calculate the budgeted total costs and cost per unit for each product line. Plant utilities and administration 212,000 5. Explain how you could use the information in requirement 4 to reduce costs. $ 1,448,600 Total Other budget information follows: Print Done Backpacks Purses Total Number of batches 6,000 Number of bags Setup 3,200 9,200 1,500 Shipping Number of batches Hours of production 2,500 4,000 120 Number of batches 80 200 Design Number of designs 2 Number of designs 2 Plant utilities and administration Hours of production 4 Choose from any drop-down list and then click Check Answer. Print Done 13 parts Clear All remaining Check