Chapter 4, Problem 23E

Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year:

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

Required:

1. 1. Calculate the global consumption ratios for the two products.
2. 2. Using the activity consumption ratios for number of orders and number of setups, show that the same cost assignment can be achieved using these two drivers as that of the complete, four-driver ABC system.