1. determine unit cost for each model using direct labour hours to apply overhead.

2. determine unit cost for model A using activity based costing.

3. which method is more accurate for assignment of overhead costs?

Question Five - 19 marks Deeshlex makes several models of dishwasher and has estimated the following costs for the up- coming year. In preparation of the new costs they also included information from an internal study that was undertaken to investigate the selection of activity drivers. Activity Setting up equipment Ordering costs Machine costs Machine costs Receiving Total Direct Labour costs Admin staff costs Expected Costs Activity Driver $480,000 Number of setups $360,000 Number of orders $840,000 Machine hours $840,000 Maintenance units $400,000 Receiving hours $1,200,000 Direct labour hours $700,000 Staff hours Expected Activity 800 24,000 52,500 26,000 25,000 12,000 7,500 R-squared Acth 600 15 0.98 16 0.72 28 16 ted 93, Below list is data related to two of the most current models. Direct materials Direct labour Units completed Direct labour hours Number of setups Maintenance units Number of orders Machine hours Receiving hours Model A $600,000 $480,000 15,000 6,000 400 8,000 6,000 24,000 3,000 Model B $800,000 $480,000 8,000 2,000 200 12,000 12,000 18,000 7,000 Question Five - 19 marks Deeshlex makes several models of dishwasher and has estimated the following costs for the up- coming year. In preparation of the new costs they also included information from an internal study that was undertaken to investigate the selection of activity drivers. Activity Setting up equipment Ordering costs Machine costs Machine costs Receiving Total Direct Labour costs Admin staff costs Expected Costs Activity Driver $480,000 Number of setups $360,000 Number of orders $840,000 Machine hours $840,000 Maintenance units $400,000 Receiving hours $1,200,000 Direct labour hours $700,000 Staff hours Expected Activity 800 24,000 52,500 26,000 25,000 12,000 7,500 R-squared Acth 600 15 0.98 16 0.72 28 16 ted 93, Below list is data related to two of the most current models. Direct materials Direct labour Units completed Direct labour hours Number of setups Maintenance units Number of orders Machine hours Receiving hours Model A $600,000 $480,000 15,000 6,000 400 8,000 6,000 24,000 3,000 Model B $800,000 $480,000 8,000 2,000 200 12,000 12,000 18,000 7,000