Multiple Versus Single Overhead Rates, Activity DriversDeoro Company has identified the following overhead activities, costs, and activity drivers for thecoming year:ActivityExpected Cost Activity Driver Activity CapacitySetting up equipment$401,000Number of setups500Ordering costs407,400Number of orders19,400Machine costs830,000Machine hours41,500Receiving481,500Receiving hours10,700Deoro produces two models of dishwashers with the following expected prime costs and activitydemands:Model AModel BDirect materials$641,000$799,000472,000492,000Direct labor17,0007,000Units completed7,0001,900Direct labor hours350150Number of setups6,60012,800Number of orders Number of orders6,60012,800Machine hours23,80017,700Receiving hours3,0007,700The company's normal activity is 8,900 direct labor hours.Required:1. Determine the unit cost for each model using direct labor hours to apply overhead. Roundintermediate calculations and final answers to nearest cent.Unit CostModel AModel B2. Determine the unit cost for each model using the four activity drivers. Round your answersto nearest cent.Unit CostModel AModel B3. Which method produces the more accurate cost assignment?

Name: Multiple Versus Single Overhead Rates, Activity DriversDeoro Company
Uploaded: 2024-03-20T06:32:49.000Z
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Description: Multiple Versus Single Overhead Rates, Activity DriversDeoro Company has identified the following overhead activities, costs, and activity drivers for thecoming year:ActivityExpected Cost Activity Driver Activity CapacitySetting up equipment$401,000

1) Overhead rate = (401000+ 407400+ 830000 + 481500) / (7000 + 1900) = 238 Model A cost per unit =…

Business

Accounting

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 3. Which method produces the more accurate cost assignment?

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 3. Which method produces the more accurate cost assignment?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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