Exercise 4-16 Multiple versus Single Overhead Rates, Activity Drivers OBJECTIVE 3 OBJECTIVE 4 Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: 6:31 AM Tue Sep 12 Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $480,000 Number of setups 600 Ordering costs 360,000 Number of orders 18,000 Machine costs 840,000 Machine hours 42,000 Receiving 400,000 Receiving hours 10,000 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B. Direct materials $600,000 $800,000 Direct labor $480,000 $480,000 Units completed 16,000 8,000 Direct labor hours 6,000 2,000 Number of setups 400 200 Number of orders 6,000 12,000 Machine hours 24,000 18,000 Receiving hours 3,000 7,000 The company's normal activity is 8,000 direct labor hours. 100% 4 6:32 AM Tue Sep 12 REQUIRED: 1. Determine the unit cost for each model using direct labor hours to apply overhead. 2. Determine the unit cost for each model using the four activity drivers. 3. Which method produces the more accurate cost assignment? Why? 100% * >