Baldwin Company produces treadmills. One of its plants produces two versions: a standard model and a deluxe model. The deluxe model has a wider and sturdier base and a variety of electronic gadgets to help the exerciser monitor heartbeat, calories burned, distance traveled, and so on. At the beginning of the year, the following data were prepared

*Please do the work in Excel table

Standard Model Expected quantity 20,000 Selling price $280 Prime costs $3 million Machine hours 25,000 Direct labor hours 50,000 Engineering support (hours) 9,000 Receiving orders processed) 2,000 Materials handling (number of moves) 10,000 Purchasing number of requisitions) 500 Maintenance (hours used) 4,000 Paying suppliers (invoices processed) 2,500 Setting up batches (number of setups) 40 Additionally, the following overhead activity costs are reported: Maintenance $ 400,000 Engineering support 600,000 Material handling 800,000 Setups 500,000 Purchasing 300,000 Receiving 200,000 Paying suppliers 200,000 $3,000,000 Deluxe Model 10,000 $575 $3.5 million 25,000 50,000 21,000 3,000 30,000 1,000 16,000 2,500 360 At the end of the year, every item was realized as budgeted. Required: 1. Calculate the cost per unit for each product using direct labor hours to assign all overhead costs. 2. Calculate activity rates and determine the overhead cost per unit. Compare these costs with those calculated using the functional-based method. Which cost is more accurate? Explain