Glock Company has identified the following overhead activities, costs, and activity drivers for the coming year:

Glock produces two models of cell phones with the following expected activity demands:

Required:
1. Determine the total overhead assigned to each product using the four activity drivers.
2. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatively inexpensive activities are allocated to the two expensive activities in proportion to their costs.
3. Using ABC as the benchmark, calculate the percentage error and comment on the accuracy of the reduced system. Explain why this approach may bedesirable.

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Activity Expected Cost Setting up equipment Ordering materials Machining Receiving Activity Driver Number of setups 36,000 Number of orders Activity Capacity 300 1,800 21,000 2,500 S252,000 252,000 Mhine hours 60,000 ng hours Model A Model B Units completed Number of setups Number of orders Machine hours Receiving hours 10,000 200 600 12,000 750 20,000 100 1,200 9,000 1,750