Exercise VI Activity Based Costing (20 Points) The Pikes Peak Leather Company manufactures leather handbags and moccasins. The company has been using the facryhead rate method but has decided to evaluate activity based costing to allocate e factory overhead. The factory overhead estimated per unit together with direct materials and direct labor will help determine selling prices. Totalbudgetedfactoryoverheadcost=$360,000 Cutting Sewing- CPurchase ucts direct labordirect labor hoursSet-Ups 0,000Se-UpsMsPections 500 60,00 andbags loccasins 100 300 400 otal$40.000 $210,000 $80.000 $20,000 $10.000 00,000 140,00 800 1,00 Ll nt of factory overhead to be allocated to each unit using activity based lans to produce 60,000 handbags and 40,000 moccasins. costing. The factory plans to