Equally Accurate Reduced ABC System 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

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. Calculate the global consumption ratios for the two products. Round your answers to two decimal places.

Global consumption ratios: Model X 0.57 Model Y 0.43 (Answers)

2. Using the activity consumption ratios for number of orders and number of setups, show that the same cost assignment can be achieved using these two drivers as that of the complete, four-driver ABC system. In your calculations round amounts to two decimal places. Round your final answers to the nearest dollar.

Model X Model Y

Setting up equipment $ $

Ordering materials

Total Overhead assigned $ $