Selected activities and other information are provided for Patterson Company for its most recent year of operations.

Required:
1. Form reduced system cost pools for activities 7 and 8.
2. Assign the costs of the reduced system cost pools to Wafer A and Wafer B.
3. What if the two activities were 1 and 3? Repeat Requirements 1 and 2. What does this imply?

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Expected Consumption Ratios Activity Driver Number of dies Number of purchase Quantity 2,000,000 2,500 Wafer A Wafer B 7. Inserting dies 8. 0.70 0.20 0.30 0.80 Purchasing materials orders 1. 3. 0.25 0.60 0.75 0.40 Developing test programs Testing products ABC assignment Total overhead cost Engineering hours Test hours 10,000 20,000 S1,500,000 1,500,000 $3,000,000