4-11 APPROXIMATELY RELEVANT ABC Golder Company has identified the following overhead activities, costs, and activity dri- vers for the coming year: LO4 Activity Expected Cost Activity Driver Activity Capacity Setting up equipment Ordering materials Machining Receiving $252,000 36,000 252,000 60,000 Number of setups Number of orders Machine hours 300 1,800 21,000 2,500 Receiving hours Golder produces two models of cell phones with the following expected activity demands: Model A Model B Units completed Number of setups Number of orders 10,000 20,000 100 200 1,200 9,000 1,750 600 12,000 750 Machine hours Receiving hours 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 expen- sive 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 be desirable.