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	$514,710	Number of setups	630
Ordering costs	437,800	Number of orders	19,900
Machine costs	732,700	Machine hours	43,100
Receiving	464,400	Receiving hours	10,800

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

	Model A	Model B
Direct materials	$564,000	$811,000
Direct labor	488,000	484,000
Units completed	17,000	8,100
Direct labor hours	5,800	2,300
Number of setups	420	210
Number of orders	6,900	13,000
Machine hours	24,300	18,800
Receiving hours	3,500	7,300

The company's normal activity is 8,100 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?