Question 3 & 4: Indirect Cost Analysis & Pricing Question 3: Allocating Indirect Costs Analyze the indirect costs below to determine proper allocation between truffles and chocolate pieces (which costs can be traced directly to truffles, and which costs can be traced directly to chocolate pieces?). There is extra information regarding the machine purchase in Exhibit #2. Allocation of original space (per Exhibit 2) Cost Original Property Taxes New Property Taxes Original Building Depreciation New Building Depreciation Original Machine Depreciation New Machine Depreciation Original Heating New Heating Original Electricity New Electricity Salesperson Wages Total Indirect Costs Truffles Chocolate Pieces 75% 25% Allocation to Product Lines Amount a. Truffles b. Chocolate Pieces $ 10,000 9,500 10,000 10,000 1,000 6,000 1,200 1,200 1,200 1,200 51,000 $ 102,300 Question 4: Calculating Suggested Selling Price Based on the 2019 forecast information provided in Exhibit #4, what should Katherine charge: a) for each truffle? b) for each chocolate piece? Markup as % of total cost (per Exhibit 4)) 35% Calculate the following: Truffles Pieces Total Direct Costs (Exhibit 4) 130,440 131,500 Total Indirect Cost (this has been linked to row 21 $ $ for you) Total Cost # of forecasted units (per Exhibit 4) Cost per piece Markup in dollars per unit Suggested selling price per unit 120,000 40,000