Patterson Company produces wafers for integrated circuits. Data for the most recent year are provided: Activity Expected Consumption Ratios Driver Wafer A Wafer B Inserting and sorting process activities: 1. Developing test programs $ 48,000 Engineering hours 0.25 0.75 2. Making probe cards 62,000 Development hours 0.15 0.85 -3. Testing products 700,000 Test hours 0.60 0.40 4. Setting up batches 0.45 145,000 Number of batches 0.55 5. Engineering design 0.15 0.85 91,000 Number of change orders 0.60 0.40 -6. Handling wafer lots 200,000 Number of moves 0.30 0.70 1,100,000 Number of dies 7. Inserting dies Procurement process activities: 0.85 0.15 700,000 Number of purchase orders 8. Purchasing materials 0.65 0.35 61,000 Number of receiving orders 9. Unloading materials 0.35 0.65 79,000 Inspection hours 10. Inspecting materials 0.50 0.50 400,000 Distance moved 11. Moving materials 0.70 0.30 32,000 Number of invoices 12. Paying suppliers $ 3,618,000 Total activity cost Unit-level (plantwide) cost assignment $2,532,600 $1,085,400 $1,772,000 $1,846,000 Activity cost assignmentb teaching and leaming grce from Cengage Laaming a Calculated using number of dies as the single unit-level driver b Calculated by multiplying the consumption ratio of each product by the cost of each activity Required: 1. Using the five most expensive activities, calculate the overhead cost assigned to each product. Assume that the costs of the other activities are assigned in proportion to the cost of the five activities. If required, round your answers to the nearest dollar Activity Budgeted Activity Cost Testing products Handling wafer lots Inserting dies Purchasing materials Moving materials Total activity cost Approx. ABC Cost Wafer A $ Wafer B 2. Calculate the error relative to the fully specified ABC product cost. Round your calculation to three decimal places and the percentage answer to one decimal place. Relative error Wafer A % Wafer B % 3. What if activities 1, 2, 5, and 8 each had a cost of $901,000 and the remaining activities had a cost of $1,750 each? Calculate the cost assigned to Wafer A by a fully specified ABC system and then by an approximately relevant ABC approach. Cost by a fully specified ABC system Cost by an approximately relevant ABC approach $