Deoro 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	$397,800	Number of setups	510
Ordering costs	409,200	Number of orders	18,600
Machine costs	710,600	Machine hours	41,800
Receiving	432,600	Receiving hours	10,300

Deoro produces two models of dishwashers with the following expected prime costs and activity demands:

Model A	Model B
Direct materials	$617,000	$836,000
Direct labor	$459,000	$460,000
Units completed	15,700	7,400
Direct labor hours	5,500	1,900
Number of setups	360	150
Number of orders	6,500	12,100
Machine hours	23,200	18,600
Receiving hours	3,800	6,500

The company's normal activity is 7,400 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 Cost
Model A	$
Model B	$

3. Which method produces the more accurate cost assignment? Answer: Four activity drivers