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 $$429,550$ Number of setups $550$

Ordering costs $351,500$ Number of orders $18,500$

Machine costs $858,900$ Machine hours $40,900$

Receiving $340,300$ Receiving hours $8,300$

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

Model A Model B

Direct materials $$559,000$ $$835,000$

Direct labor $468,000454,000$

Units completed $16,0007,400$

Direct labor hours $5,0002,400$

Number of setups $370180$

Number of orders $6,90011,600$

Machine hours $23,50017,400$

Receiving hours $2,0006,300$

The company's normal activity is $7,400$ 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 $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?