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:
Activity
Expected Cost
Activity Driver
Activity Capacity
Setting up equipment
$480,850
Number of setups
590
Ordering costs
425,500
Number of orders
18,500
Machine costs
700,400
Machine hours
41,200
Receiving
298,800
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
$570,000
$821,000
Direct labor
$462,000
$472,000
Units completed
16,500
8,800
Direct labor hours
6,600
1,800
Number of setups
400
190
Number of orders
6,300
12,200
Machine hours
23,400
17,800
Receiving hours
2,300
6,000
The company's normal activity is 8,400 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
$
Model B
$
2. Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent.
Unit Cost
Model A
$
Model B
$
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