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?LO1

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