Question: Patterson Company produces wafers for integrated circuits Data for the

Patterson Company produces wafers for integrated circuits. Data for the most recent year are provided:
1. Using the five most expensive activities, calculate the overhead cost assigned to each product. Assume that the costs of the other activities are assigned in proportion to the cost of the five activities.
2. CalculatetheerrorrelativetothefullyspecifiedABCproductcostandcommentontheoutcome.
3. What if activities 1, 2, 5, and 8 each had a cost of $650,000 and the remaining activities had a cost of $50,000? Calculate the cost assigned to Wafer A by a fully specified ABC system and then by an approximately relevant ABC approach. Comment on the implications for the approximately relevant approach.

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