Middle East Company produces Simple and Executive products and operates at capacity. Data related to the two products are presented below: Annual production in units Direct material costs Direct manufacturing labor costs Direct manufacturing labor-hours Machine hours Number of Setups Inspection hours Simple 200,000 $300,000 $200,000 20,000 10,000 400 3,000 Executive 100,000 $400,000 $300,000 30,000 20,000 500 4,000 Manufacturing overhead costs are as follows: Assembly costs Setup costs Inspection costs Total Manufacturing overhead cost Cost Driver $750,000 Direct Labor-hours $270,000 Number of setups $140,000 Inspection hours $1,160,000 a. Allocate the manufacturing overhead costs to the cost objects (Simple and Executive) based on simple costing system and using machine hours as a single cost allocation base. Compute the manufacturing cost per unit for each product (30 marks). b. Allocate the manufacturing overhead costs to the cost objects (Simple and Executive) by implementing ABC (activity-based costing system). There are three activities: assembly, setup, and inspection. Compute the manufacturing cost per unit for each product. (60 marks). C. Explain why Middle East Company might favor the ABC system over simple costing system (10 points)