eBook Show Me How

Question Content Area

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 $120$

Ordering materials $24,000$ Number of orders $1,200$

Machining $94,500$ Machine hours $9,450$

Receiving $23,700$ Receiving hours $1,185$

Silven produces two models of cell phones with the following expected activity demands:

Model X Model Y

Units completed $4,8009,600$

Number of setups $8040$

Number of orders $400800$

Machine hours $5,4004,050$

Receiving hours $395790$

Required:

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

Total Overhead Assigned

Model X $fill in the blank $1$

Model Y $fill in the blank $2$

$2.$ 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. Round interim calculations to two decimal places and round your final answers to the nearest dollar.

Total Overhead Assigned

Model X $fill in the blank $3$

Model Y $fill in the blank $4$

$3.$ Using ABC as the benchmark, calculate the percentage error. Round your answers to two decimal places.

Percentage Error

Model X fill in the blank $5$

$\%$

Model Y fill in the blank $6$

$\%$