5-18 Plant-wide, department, and activity-cost rates. Acclaim Inc. makes two styles of tro- phies, basic and deluxe, and operates at capacity. Acclaim does large custom orders. Acclaim budgets to produce 10,000 basic trophies and 5,000 deluxe trophies. Manufacturing takes place in two production departments: forming and assembly. In the forming department, indirect manufacturing costs are accumu- lated in two cost pools, setup and general overhead. In the assembly department, all indirect manufacturing costs are accumulated in one general overhead cost pool. The basic trophies are formed in batches of 200 but because of the more intricate detail of the deluxe trophies, they are formed in batches of 50. The controller has asked you to compare plant-wide, department, and activity-based cost allocation. Acclaim Budgeted Information for the Year Ended November 30, 2017 Forming Department Basic Deluxe Total Direct materials $60,000 $35,000 $95,000 Direct manufacturing labour 30,000 20,000 50,000 Overhead costs 48,000 Setup 32,000 General overhead Assembly Department Direct materials Direct manufacturing labour Overhead costs General overhead Basic $5,000 15,000 Deluxe $10,000 25,000 Total $15,000 40,000 40,000 Required 1. Calculate the budgeted unit cost of basic and deluxe trophies based on a single plant-wide overhead rate, if total overhead is allocated based on total direct costs. (Don't forget to include direct material and direct manufacturing labour cost in your unit cost calculation.) 2. Calculate the budgeted unit cost of basic and deluxe trophies based on departmental overhead rates, where forming department overhead costs are allocated based on direct manufacturing labour costs of the forming department and assembly department overhead costs are allocated based on total direct manufacturing labour costs of the assembly department. 3. Calculate the budgeted unit cost of basic and deluxe trophies if Acclaim allocates overhead costs in each department using activity-based costing, where setup costs are allocated based on number of batches and general overhead costs for each department are allocated based on direct manufacturing labour costs of each department. 4. Explain briefly why plant-wide, department, and activity-based costing systems show different costs for the basic and deluxe trophies. Which system would you recommend and why? EAA