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	$458,640	Number of setups	560
Ordering costs	411,700	Number of orders	17,900
Machine costs	866,000	Machine hours	43,300
Receiving	386,100	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	$628,000	$796,000
Direct labor	$487,000	$493,000
Units completed	15,700	7,800
Direct labor hours	6,200	1,500
Number of setups	370	190
Number of orders	6,100	11,800
Machine hours	24,500	18,800
Receiving hours	2,300	7,600

The company's normal activity is 7,700 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?