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900 Exercise 4.22 Approximately Relevant ABC Silven Company has identified the following overhead activities, costs, and activity drivere the coming year: Activity Capacity Activity Driver Activity Expected Cost 150 Setting up equipment Number of setups $126,000 Ordering materials 18,000 Number of orders 10,500 Machining Machine hours 126,000 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 600 Machine hours 6,000 4,500 Receiving hours 875 300 375 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 expensive activi- ties. 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