Requiremnt 4. HELP last two parts BACKPACKS & PURSES

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. Requirement 1. Identify the cost hierarchy level for each cost category. Cost Cost Hierarchy Level Direct materials-purses Output unit-level cost Direct materials-backpacks Output unit-level cost . Direct labor-purses Output unit-level cost Direct labor-backpacks Output unit-level cost Setup Batch-level cost Shipping Batch-level cost Design Product-sustaining cost Plant utilities and administration Facility-sustaining cost Requirement 2. Identify the most appropriate cost driver for each cost category. Explain briefly your choice of cost driver. Cost Cost Driver Reason Direct materials-purses Number of purses The cost is determined by the number of output. Direct materials-backpacks Number of backpacks The cost is determined by the number of output. Direct labor-purses Number of purses The cost is determined by the number of output.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 dn 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: B (Click the icon to view the budgeted information.) \\ Read the requirements. (ERERL) Requirement 2. Identify the most appropriate cost driver for each cost category. Explain briefly your choice of cost driver. Cost Cost Driver Reason Direct materialspurses Number of purses The cost is determined by the number of output. Direct materialsbackpacks Number of backpacks The cost is determined by the number of output. Direct laborpurses Number of purses The cost is determined by the number of output. Direct laborbackpacks Number of backpacks The cost is determined by the number of output. Setup Number of batches The cost is determined by the number of batches. Shipping Number of batches The cost is determined by the number of batches. i Design Number of designs The cost is determined by the number of designs. Plant utilities and administration Hours of production The more the machines are used the higher the cost. Requirement 3. Calculate the budgeted cost per unit of cost driver for each cost category. (Round the cost driver rates to four decimal places. Abbreviations used: "util.\" = utilities, "admin." = administration, "DM" = direct materials, "DL" = direct labor.) Cost + Total quantity of cost driver = Cost driver rate DMpurses $ 382,800 =+ 3,300 = | $ 116.00 per purse DMbackpacks $ 42128 - 5:8501- el 75001 perbackpacis DLourses 89,100 - 8,300/ = |$ 27.00 per purse 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. Fialit uuntues allu auTHISu'auUI I IVUIO VI PIVUVUVIL Requirement 3. Calculate the budgeted cost per unit of cost driver for each cost category. (Round the cost driver rates to four decimal places. Abbreviations used: "util." = utilities, "admin." = administration, "DM" = direct materials, "DL" = direct labor.) Cost + Total quantity of cost driver = Cost driver rate DM-purses EA 382,800 + 3,300 = $ 116.00 per purse DM-backpacks 421,200 + 5,850 = 72.00 per backpack DL-purses 89,100 3,300 = 27.00 per purse DL-backpacks 105,300 + 5,850 = EA 18.00 per backpack Setup costs 49,735 203 E $ 245.00 per batch Shipping costs 72,065 + 203 $ 355.00 per batch Design costs 167,000 + 5 = $ 33,400.00 per design EA Plant util. and admin. 208,000 4, 160 = $ 50.00 per hour Requirement 4. Calculate the budgeted total costs and cost per unit for each product line. (Round the cost per unit amounts to the nearest cent, X.XX.) Backpacks Direct materials Direct laborPumpkin 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. DL-purses 89, 100 3,300 = $ 27.00 per purse DL-backpacks 105,300 5,850 = $ 18.00 per backpack Setup costs 49,735 203 = $ 245.00 per batch Shipping costs 72,065 203 = $ 355.00 per batch Design costs 167,000 + 5 = $ 33,400.00 per design Plant util. and admin. 208,000 + 4,160 = $ 50.00 per hour Requirement 4. Calculate the budgeted total costs and cost per unit for each product line. (Round the cost per unit amounts to the nearest cent, X.XX.) Backpacks Direct materials Direct labor Setup Shipping Design Plant utilities and administration Total costs{products i ~ Direct labor ~ Setup Data table i Pumpkin Bags \\ Budget for Costs and Activities For the Year Ended February 28, 2014 Direct materialspurses $ 382,800 | Direct materialsbackpacks 421,200 Direct manufacturing laborpurses 89,100 Direct manufacturing laborbackpacks 105,300 Setup 49,735 Shipping 72,065 | Design 167,000 Plant utilities and administration ! 208,000 | Total $ 1,495,200 Other budget information follows: Backpacks Purses Total Number of bags 5,850 3,300 9,150 Hours of production 1,560 2,600 4,160 Ann | LIl batches. Each spring, PB comes out with new designs for the backpack an bags are all made on the same fabrication equipment that is expected to - the production of each new batch of products. When completed, each batch ts. Budgeted information for the year is as follows: ' Requirements A 1. Identify the cost hierarchy level for each cost category. 2. Identify the most appropriate cost driver for each cost category. Explain brief 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. G B