Natha Corporation manufacturers two types of travel mugs: Simple, and Sophisticated. The company budgets to produce 20,000 units of the Simple mugs and 10,000 units of the Sophisticated mugs. Manufacturing takes place in two production departments: Machining and Assembly. The Simple mugs are produced in batches of 200 units; however, due to the more intricate detail included on the Sophisticated mugs, they are produced in batches of 50 units. 3 The company's Controller has asked you to compare the plant wide, departmental, and activity based cost allocation methods. To assist in your analysis, the Controller has provided you with the budgeted cost information for the 2020 fiscal year.

Natha Budgeted Information for the Year Ended December 31, 2020 Machining Department Simple Sophisticated Total Direct materials cost $90,000.00 $52,500.00 $142.500.00 Direct labour cost 45,000.00 30,000.00 75,000.00 Overhead costs 120,000.00 Machine hours 12,000 18,000 30,000 Direct labour hours 4,000 1,000 5,000 Assembly Department Simple Sophisticated Total Direct materials cost $7,500.00 $15,000.00 $22,500.00 Direct labour cost 22,500.00 37,500.00 60,000.00 Overhead costs 40,000.00 Machine hours 6.000 4,000 10,000 Direct labour hours 3,500 500 4,000{A} Assume that the corporation is using a single plantride overhead rate based on machine hours. :1. Calculate the manufacturing overhead rate. 1:. Calculate the total manufacturing cost for each product line. e. Calculate the total manufacturing cost per unit for each product line. {B} Assume that management at Natha Corporation has decided to use departmental overhead rates. 3. Calculate the departmental overhead rates, based on machine hours in the Machining department and direct labour hours in the Assembly.r department. b. Calculate the total manufacturing cost for each product line. e. Calculate the total manufacturing cost per unit for each product line. {CiAssume that management at Natha Corporation has decided to implement an activity- hased eosting system. You have identied three relevant activities. Information for each activity,r is shown below. Quantity of Cost Driver Activities Cost Driver Activity Cost Simple Sophisticated Total Materials handling Number of parts $45,000.00 6,000 9,000 15,000 Setups Number of setups $74,500.00 104 45 149 Inspection Inspection hours $40,500.00 7,500 1,500 9,000 $160,000.00 a. Calculate the activity-based costing overhead rates. b. Calculate the total manufacturing cost for each product line. c. Calculate the total manufacturing cost per unit for each product line. (D) Discuss the advantages and disadvantages of each overhead allocation method mentioned in (A) to (C). (E) Which method do you recommend Natha Corporation use for its costing system? In your response, please refer to your calculations in (A) to (C)