Senior Basic Deluxe Direct-materials cost $ 110,000 Direct-labor cost $ 50,000 $ 12,806 $ 230,000 40,000 $ 5,055 $ 250,000 15,839 Kilowatt hours 170,000 Engineering change notices 21 4 85 $ Materials handling Engineering Power 22,000 88,000 58,500 $ 168,500 Total indirect production cost Requirement 1. Compute the indirect production costs allocated to each product with the ABC system. Determine the formula, then compute the indirect cost rates for materials handling, engineering and power costs. (Round the rates to two decimal places, XX.) Indirect cost allocation rate Materials handling Engineering 11 Power I! Now determine the indirect production costs allocated to each product, beginning with the Senior product, with the ABC system Senior Basic Deluxe Indirect production costs: Materials handling Engineering Power Total indirect costs allocated Requirement 2. Suppose all indirect production costs had been allocated to products in proportion to their direct-labor costs. Compute the indirect production costs allocated to each product. Begin by determining the indirect cost allocation rate assuming all indirect production costs are allocated to products in proportion to their direct-labor costs using the same formula labels as you determined in requirement 1. Total indirect production Now determine the total indirect production costs allocated to each product assuming all indirect production costs are allocated to products in proportion to their direct-labor costs. Senior Basic Deluxe Indirect production costs allocated Requirement 3. In which product costs, those in requirement 1 or those in requirement 2, do you have the most confidence? Why? The product costs from system, is likely more accurate since it