Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Approximately Relevant ABC Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity
Approximately Relevant ABC Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $126,000 Number of setups 150 Ordering materials 18,000 Number of orders 900 Machining 126,000 Machine hours 10,500 Receiving 30,000 Receiving hours 1,250 Silven produces two models of cell phones with the following expected activity demands: Model X Model Y 5,000 10,000 100 50 Units completed Number of setups Number of orders Machine hours Receiving hours 300 600 4,500 6,000 375 875 Required: 1. Determine the total overhead assigned to each product using the four activity drivers. Total Overhead Assigned Model x 171,000 $ 129,000 Model Y 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. In your calculations round interim calculations to the nearest cent and round your final answers to the nearest dollar. Model X Total Overhead Assigned $ 185,714. X 114,285. x Model Y 3. Using ABC as the benchmark, calculate the percentage error. Round your answers to one decimal place. Model X Model Y Percentage Error -8.61 X % 11.41 X %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started