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 $144,000 Number of setups 120 Ordering materials 14,400 Number of orders 900 Machining 103,950 Machine hours 9,450 Receiving 22,770 Receiving hours 1,035 Silven produces two models of cell phones with the following expected activity demands: Model X Model Y Units completed 5,600 11,200 Number of setups 80 40 Number of orders 300 600 Machine hours 5,400 4,050 Receiving hours 345 690 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 %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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	$144,000	Number of setups		120
Ordering materials	14,400	Number of orders		900
Machining	103,950	Machine hours		9,450
Receiving	22,770	Receiving hours		1,035

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

	Model X	Model Y
Units completed	5,600	11,200
Number of setups	80	40
Number of orders	300	600
Machine hours	5,400	4,050
Receiving hours	345	690

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.