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	$480,600	Number of setups	600
Ordering costs	343,900	Number of orders	18,100
Machine costs	991,300	Machine hours	43,100
Receiving	362,700	Receiving hours	9,300

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

	Model A	Model B
Direct materials	$611,000	$807,000
Direct labor	459,000	474,000
Units completed	15,800	7,500
Direct labor hours	5,100	2,300
Number of setups	390	210
Number of orders	6,700	11,400
Machine hours	24,800	18,300
Receiving hours	2,700	6,600

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	$fill in the blank 1
Model B	$fill in the blank 2

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

	Unit Cost
Model A	$fill in the blank 3
Model B	$fill in the blank 4

3. Which method produces the more accurate cost assignment?