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	$433,400	Number of setups	550
Ordering costs	316,200	Number of orders	18,600
Machine costs	952,200	Machine hours	41,400
Receiving	366,300	Receiving hours	9,900

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

	Model A	Model B
Direct materials	$643,000	$823,000
Direct labor	470,000	485,000
Units completed	16,900	8,200
Direct labor hours	5,800	1,800
Number of setups	380	170
Number of orders	5,600	13,000
Machine hours	23,000	18,400
Receiving hours	2,200	7,700

The company's normal activity is 7,600 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?