1. 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	$440,000	Number of setups	550
   Ordering costs	388,700	Number of orders	16,900
   Machine costs	759,600	Machine hours	42,200
   Receiving	431,200	Receiving hours	9,800

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

   	Model A	Model B
   Direct materials	$640,000	$757,000
   Direct labor	476,000	488,000
   Units completed	15,100	8,300
   Direct labor hours	5,100	2,200
   Number of setups	380	170
   Number of orders	5,200	11,700
   Machine hours	24,400	17,800
   Receiving hours	2,500	7,300

   The company's normal activity is 7,300 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	$
   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?

   Direct labor hours or Four activity drivers