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 $478,200 Number of setups 600

Ordering costs 432,400 Number of orders 18,800

Machine costs 932,800 Machine hours 42,400

Receiving 378,000 Receiving hours 10,800

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

Model A Model B

Direct materials $586,000 $781,000

Direct labor 456,000 470,000

Units completed 15,900 8,700

Direct labor hours 6,900 1,600

Number of setups 420 180

Number of orders 5,800 13,000

Machine hours 24,300 18,100

Receiving hours 3,300 7,500

The company's normal activity is 8,500 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?

Multiple Versus Single Overhead Rates, Activity Orivers Decro Company has identified the followng overhead actovities; costs, and activity drivers for the coming vear: Devoro produces two modets of dushashers with the foboming expected prime costs and activity demands! The company's normal sctivity is 8,500 direct labar hours. Multiple Versus Single Overhead Rates, Activity Orivers Decro Company has identified the followng overhead actovities; costs, and activity drivers for the coming vear: Devoro produces two modets of dushashers with the foboming expected prime costs and activity demands! The company's normal sctivity is 8,500 direct labar hours