Trendy Inc. makes two styles of trophies, basic and deluxe, and operates at capacity. Trendy does large custom orders. Trendy 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 accumulated 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 plantwide, department, and activity-based cost allocation.

Trendy Budgeted Information for the Year Ended November 30, 2020
Forming Department	Basic	Deluxe	Total
Direct materials	$25,000	$19,800	$44,800
Direct manufacturing labor	24,000	25,000	49,000
Overhead costs
Setup			36,750
General overhead			31,850
Assembly Department	Basic	Deluxe	Total
Direct materials	$ 5,000	$ 4,450	$ 9,450
Direct manufacturing labor	15,500	19,500	35,000
Overhead costs
General overhead			42,000

1. Calculate the budgeted unit cost of basic and deluxe trophies based on a single plantwide overhead rate, if total overhead is allocated based on total direct costs. (Dont forget to include direct material and direct manufacturing labor 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 labor costs of the forming department and assembly department overhead costs are allocated based on total direct manufacturing labor costs of the assembly department.

3. Calculate the budgeted unit cost of basic and deluxe trophies if Trendy 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 labor costs of each department.

4. Explain briefly why plantwide, department, and activity-based costing systems show different costs for the basic and deluxe trophies. Which system would you recommend and why?