Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company.pdf

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Deoro Company produces two dishwasher models and identified overhead activities, costs, and activity drivers for the coming year. The company expects 8,200 direct labor hours of normal activity. The document asks to calculate the unit cost of each model using direct labor hours and four activity drivers to apply overhead, and determine which method produces a more accurate cost assignment.

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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: Deoro produces
two models of dishwashers with the following expected prime costs and activity demands: The
company's normal activity is 8,200 direct labor hours.
The company's normal octivity is 8,200 direct labor hours. Required: 1. Determine the unit cost
for eoch model using direct lobor hours to apply overhead. Round intermediate calculations and
final answers to nearest cent. 2. Determine the unit cost for each model using the four activity
drivers. Round your answers to nearest cent. 3. Which method produces the more accurate cost
assignment?

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