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	$449,680	Number of setups	560
Ordering costs	343,900	Number of orders	18,100
Machine costs	915,600	Machine hours	43,600
Receiving	457,800	Receiving hours	10,900

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

	Model A	Model B
Direct materials	$638,000	$823,000
Direct labor	$493,000	$465,000
Units completed	15,600	8,700
Direct labor hours	6,000	2,300
Number of setups	350	210
Number of orders	6,100	12,000
Machine hours	24,700	18,900
Receiving hours	3,700	7,200

The company's normal activity is 8,300 direct labor hours.

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 Model B 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