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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	$515,460	Number of setups	660
Ordering costs	364,000	Number of orders	18,200
Machine costs	936,100	Machine hours	40,700
Receiving	416,000	Receiving hours	10,400

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

	Model A	Model B
Direct materials	$552,000	$816,000
Direct labor	487,000	464,000
Units completed	16,900	7,500
Direct labor hours	5,700	2,000
Number of setups	430	230
Number of orders	5,800	12,400
Machine hours	23,700	17,000
Receiving hours	3,300	7,100

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?