Simplifying the ABC System: Approximately Relevant ABC Systems Patterson Company produces wafers for integrated circuits. Data for the most recent year are provided: Activity Inserting and sorting process activities: Expected Consumption Ratios Driver Wafer A Wafer B 1 Developing test programs $ 50,000 Engineering hours 0.25 0.75 Making probe 2. 60,000 Development hours 0.10 0.90 cards Testing products 600,000 Test hours 0.60 0.40 Setting up 4. 135,000 Number of batches 0.55 0.45 batches Engineering Number of change 5. 90,000 0.15 0.85 design orders Handling wafer 6. 300,000 Number of moves 0.45 0.55 lots 7. Inserting dies 700,000 Number of dies 0.70 0.30 Procurement process activities: Purchasing Number of 8. 400,000 0.20 0.80 materials purchase orders Unloading 9. 60,000 materials Number of receiving orders 0.35 0.65 Inspecting 10. 75,000 Inspection hours 0.65 0.35 materials 11. Moving materials 500,000 Distance moved 0.50 0.50 12. Paying suppliers 30,000 Number of invoices 0.30 0.70 Total activity cost $ 3,000,000 Simplifying the ABC System: Approximately Relevant ABC Systems Patterson Company produces wafers for Integrated circuits. Data for the most recent year are provided: Expected Consumption Ratios Wafer A Wafer B Activity Driver Inserting and sorting process activities: 1. Developing test programs $ 50,000 Engineering hours 0.75 2. Making probe cards 60,000 Development hours 0.10 0.90 3. Testing products 600,000 Test hours 0.60 0.40 4. Setting up batches 135,000 Number of batches 0.55 0.45 5. Engineering design 90,000 Number of change orders 0.15 0.85 6. Handling wafer lots 300,000 Number of moves 0.45 7. Inserting dies 700,000 Number of dies 0.70 0.30 Procurement process activities: 8. Purchasing materials 400,000 Number of purchase orders 0.201 0.80 Unloading materials 50,000 Number of receiving orders 0.35 0.65 10. Inspecting materials 75,000 Inspection hours 0.65 0.35 11. Moving materials 500,000 Distance moved 0.50 0.50 12. Paying suppliers 30,000 Number of invoices 0.30 0.70 Total activity cost $ 3,000,000 12.19000 1900003 $1,500,000 $1,500,000 Calculated using number of dies as the simple unt-level driver. Calculated by multiplying the consumption rate of each product by the coat at each activity. Required: 1. Ling the five most expensive activities, calculate the overhead cast assigned to each product. Assures that the coats of the other in proportion to the cost of the ficti Activity Testing products Budgeted Activity Cost Treeting Purching meter Poxing mat Total activity cost Approx. AC Cast A Approx. ACT 3. Calculate the relative to the fully speaked ABC product one Round your calcetes to three decmel places and the percentage are tone del place Relative error 3.2.5 and 8 each had a cost of $650,000 and the remaining advibes not a cost of $50,000 each calonate the cost assigned to wator A by a fully specified ABC cystem and then by an aporcimately relevant ABC approach Co by a fully spec Cat by an approximately relevent ABC approach