StarMugs Company manufactures two products: insulated water bottles and travel mugs. The water bottles are more complex of the two products, and they require more direct labor time and more machine time per unit than the travel mugs. Activity PoolOvertead Ooetsoal Driver Usage $256.000 $110.000 $136000 -02.000 3,200 stups 2,750 pundhase orders Materials purchasing 27200 machine hours Total omteadts Travel MuInslated Water Bottles Number of Units Ptoduced Drect materials cost Drect labor cost Dred labor hours S 1500 per unit $ 525 per unit s 3000 per unit s 1400 per unit 30,000 400 20.000 2.800 Purchase orders Machine hours 19.200 Manufacturing overhead is currently assigned to the products on the basis of direct labor hours. The company has gathered some activity information and is interested in the differences between its present costing method and activity- based costing. All overhead costs should be allocated to the products. The overhead cost pools and activity drivers, along with other product information are as follows: Required: Using the traditional method of allocating overhead based on direct labor hours, compute the unit cost of travel mugs and insulated water bottles: Determine the overhead rate per direct labor hour Allocate overhead to each product based on the direct labor hours used by each iDivide the total overhead allocated to each product by he number o overhead cost per unit. f products produced to obtain the . Add the overhead cost per unit to the direct materials and direct labor costs per uni to obtain the unit product cost. bi Using an activity-based costing approach, compute the unit product cost for the travel mugs and water bottles: Determine the three activity rates. i. Allocate overhead to each product based on the activity drivers used by each. Total the three activities allocations to arrive at the total overhead allocated to each product. Divide the total overhead allocated to each product by the number of products produced to obtain the overhead cost per unit. . Add the overhead cost per unit to the direct materials and direct labor costs per unit to obtain the unit product cost. oWhy would your answer to a(iv) and b(iv) differ? Be specific