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 Number of setups 610 Ordering costs Number of orders 16,500 Machine costs Machine hours 43,700 Receiving Receiving hours 9,800 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B $766,000 499,000 7,000 2,300 250 Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours Receiving hours $490,440 313,500 917,700 382,200 $610,000 451,000 15,500 6,400 360 5,400 24,900 2,700 11,100 18,800 7,100

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 Number of setups 610 Ordering costs Number of orders 16,500 Machine costs Machine hours 43,700 Receiving Receiving hours 9,800 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B $766,000 499,000 7,000 2,300 250 Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours Receiving hours $490,440 313,500 917,700 382,200 $610,000 451,000 15,500 6,400 360 5,400 24,900 2,700 11,100 18,800 7,100

Name: Multiple versus SingleKates, ActivityDeoro Company has identified the
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Description: Multiple versus SingleKates, ActivityDeoro Company has identified the following overhead activities, costs, and activity drivers for the coming year:ActivityExpected Cost Activity Driver Activity CapacitySetting up equipment$490,440Number of setups6

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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< Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Expected Cost Activity Driver Activity Capacity Number of setups Number of orders Activity Setting up equipment Ordering costs Machine costs Receiving Receiving hours Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours Receiving hours $464,550 Required: 336,300 747,000 424,200 Model A Machine hours $604,000 498,000 17,000 5,800 410 Model B $804,000 456,000 8,700 1,500 6,200 23,500 3,800 The company's normal activity is 7,300 direct labor hours. 160 11,500 18,000 6,300 570 17,700 41,500 10,100 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent.
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