Approximately Relevant ABC

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

Activity Expected Costs 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

Units Completed 5,000 10,000

Number of setups 100 50

Number of orders 300 600

Machine Hours 6,000 4,500

Receiving hours 375 875

Required:

1. Determine the total overhead assigned to each product using the four activity drivers.

Total Overhead assigned:

Model X:

Model Y:

2. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatvely inexpensive activities to the two expensive activities in proportion to their costs. Round interim calculation to 2 decimal places and then round your final answers to the nearest whole dollar.

Total Overhead assigned

Model X:

Model Y:

3. Using ABC as the benchmark, calculate the percentage error. Enter as a one-decimal percent, e.g. .0975 should enter as 9.8.

Percentage Error

Model X:

Model Y: