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Simplifying the ABC System: Equally Accurate Reduced ABC Systems Selected activities and other information are provided for Patterson Company for its most recent year of

  1. Simplifying the ABC System: Equally Accurate Reduced ABC Systems

    Selected activities and other information are provided for Patterson Company for its most recent year of operations.

    Expected Consumption Ratios
    Activity Driver Quantity Wafer A Wafer B
    7. Inserting dies Number of dies 2,500,000 0.7 0.3
    8. Purchasing materials Number of purchase orders 2,000 0.2 0.8
    1. Developing test programs Engineering hours 10,000 0.25 0.75
    3. Testing products Test hours 18,000 0.6 0.4
    ABC assignments $175,000 $175,000
    Total overhead cost $350,000

    Required:

    1. Form reduced system cost pools for activities 7 and 8. Do not round interim calculations. Round your final answers to the nearest dollar.

    Inserting dies cost pool $fill in the blank 1
    Purchasing cost pool $fill in the blank 2

    2. Assign the costs of the reduced system cost pools to Wafer A and Wafer B. Do not round interim calculations. Round your final answers to the nearest dollar.

    Wafer A $fill in the blank 3
    Wafer B $fill in the blank 4

    3. What if the two activities were 1 and 3? Repeat Requirements 1 and 2.

    Form reduced system cost pools for activities 1 and 3.

    Do not round interim calculations. Round your final answers to the nearest dollar.

    Developing test programs cost pool $fill in the blank 5
    Testing products cost pool $fill in the blank 6

    Assign the costs of the reduced system cost pools to Wafer A and Wafer B.

    Wafer A $fill in the blank 7
    Wafer B $fill in the blank 8

image text in transcribed

Expected Consumption Ratios Wafer A Wafer B 0.7 0.3 Driver Activity 7. Inserting dies Quantity 2,500,000 8. Purchasing materials 2,000 0.2 0.8 Number of dies Number of purchase orders Engineering hours Test hours 10,000 0.25 0.75 18,000 0.6 1. Developing test programs 3. Testing products ABC assignments Total overhead cost Required: $175,000 0.4 $175,000 $350,000 1. Form reduced system cost pools for activities 7 and 8. Do not round interim calculations. Round your final answers to the nearest dollar. Inserting dies cost pool Purchasing cost pool 2. Assign the costs of the reduced system cost pools to Wafer A and Wafer B. Do not round interim calculations. Round your final answers to the nearest dollar. Wafer A Il Wafer B 3. What if the two activities were 1 and 3? Repeat Requirements 1 and 2. Form reduced system cost pools for activities 1 and 3. Do not round interim calculations. Round your final answers to the nearest dollar. Developing test programs cost pool Testing products cost pool Assign the costs of the reduced system cost pools to Wafer A and Wafer B. Wafer A Wafer B

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