Plata Company has identified the following overhead activities, costs, and activity drivers for the coming year:

Required:
1. Determine the unit cost for each model using direct labor hours to apply overhead.
2. Determine the unit cost for each model using the four activity drivers.
3. Which method produces the more accurate cost assignment? Why?LO1 

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Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $120,000 Number of setups 300 Ordering costs 90,000 Number of orders 9,000 Machine costs 210,000 Machine hours 21,000 Receiving 100,000 Receiving hours 5,000 Plata produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $150,000 $200,000 Direct labor $120,000 $120,000 Units completed 8,000 4,000 Direct labor hours 3,000 1,000 Number of setups 200 100 Number of orders 3,000 6,000 Machine hours 12,000 9,000 1,500 3,500 Receiving hours The company's normal activity is 4,000 direct labor hours.