THIS IS FOR COST ACCOUNTING COURSE TEXTBOOK CORNERSTONE OF COST MANAGEMENT EXERCISE 4.10

Simplifying the ABC System: Equally Accurate Reduced ABC Systems 0.3 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 Number of purchase 8. Purchasing materials 1,500 0.2 0.8 orders 1. Developing test programs Engineering hours 10,500 0.25 0.75 3. Testing products Test hours 18,500 0.6 0.4 ABC assignments $135,000 $135,000 Total overhead cost $270,000 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 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. L Wafer A Wafer B $0 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