Question
Fill in the Blanks & Answer the last question ! . Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead
Fill in the Blanks & Answer the last question !
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Multiple Versus Single Overhead Rates, Activity Drivers
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 $492,880 Number of setups 610 Ordering costs 342,000 Number of orders 17,100 Machine costs 748,800 Machine hours 41,600 Receiving 349,200 Receiving hours 9,700 Deoro produces two models of dishwashers with the following expected prime costs and activity demands:
Model A Model B Direct materials $558,000 $807,000 Direct labor 486,000 467,000 Units completed 16,800 7,100 Direct labor hours 5,100 2,200 Number of setups 370 240 Number of orders 5,900 11,200 Machine hours 24,600 17,000 Receiving hours 2,700 7,000 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 the 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? Direct Labor Hours or Four Activity Drivers
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