Business, 15.02.2021 20:00 tonyacoolmom

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 $475,020 Number of setups 580
Ordering costs 314,500 Number of orders 18,500
Machine costs 963,600 Machine hours 43,800
Receiving 445,500 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 $645,000 $781,000
Direct labor $467,000 $450,000
Units completed 15,500 7,400
Direct labor hours 6,400 2,200
Number of setups 390 190
Number of orders 6,900 11,600
Machine hours 24,900 18,900
Receiving hours 3,600 6,300

The company's normal activity is 9,100 direct labor hours.

Required:
a. Determine the unit cost for each model using direct labor hours to apply overhead.
b. Determine the unit cost for each model using the four activity drivers.

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