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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: 680 Activity
Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: 680 Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $543,320 Number of setups Ordering costs 295,800 Number of orders 17,400 Machine costs 906,400 Machine hours 41,200 Receiving 321,900 Receiving hours 8,700 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $620,000 $763,000 Direct labor $472,000 $458,000 Units completed 16,900 Direct labor hours 6,900 1,500 Number of setups 250 Number of orders 5,800 11,600 Machine hours 23,300 17,900 Receiving hours 2,000 6,700 7,800 430 The company's normal activity is 8,400 direct labor hours. The company's normal activity is 8,400 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 100.49 X Model B 47.33 X 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
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