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

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

The company's normal activity is 8,000 direct labor hours.

Required:

1. Determine the unit cost for each model using direct labor hours to apply overhead.

	Unit Cost
Model A	$
Model B	$

2. Determine the unit cost for each model using the four activity drivers. Round your answers to the nearest cent.

	Unit Cost
Model A	$
Model B	$

3. Which method produces the more accurate cost assignment?
 
 

Activity Expected Cost Activity Driver Activity Capacity Setting up equipment Ordering costs Machine costs Receiving $480,000 360,000 840,000 600 18,000 42,000 Number of setups Number of orders Machine hours 400,000 Receiving hours 10,000