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Deare Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up
Deare Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $487,390 610 Number of setups Number of orders Ordering costs 430,100 18,700 Machine costs 975,200 Machine hours 42.400 Receiving 432,900 Receiving hours 11,700 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $564,000 $765,000 Direct labor 471,000 450,000 15,300 Units completed 8.900 Direct labor hours 1,900 5,400 390 Number of setups 220 Number of orders 12,700 6,000 24,100 Machine hours 18,300 Receiving hours 3,700 8,000 The company's normal activity is 7,300 direct labor hours. Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. Unit Cost Model A Model B 2. Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent. Unit Cust 100 101 Model A Model D 3. Which method produces the more accurate cost assignment
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