Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming...
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Accounting
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year:
ActivityExpected CostActivity DriverActivity Capacity Setting up equipment$481,290Number of setups610 Ordering costs402,500Number of orders17,500 Machine costs858,000Machine hours42,900 Receiving345,600Receiving hours9,600 Deoro produces two models of dishwashers with the following expected prime costs and activity demands:
Model AModel B Direct materials$650,000$844,000 Direct labor482,000472,000 Units completed15,1008,800 Direct labor hours6,5001,600 Number of setups390220 Number of orders5,10012,400 Machine hours23,90019,000 Receiving hours3,2006,400 The company's normal activity is 8,100 direct labor hours.
Required:
1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent.
Unit Cost Model A$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?
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