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1 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: 1. Developing test programs $ 45,000 2. Making probe cards 60,000 3. Testing products 600,000 4. Setting up batches 140,000 5. Engineering design 96,000 6. Handling wafer lots 400,000 7. Inserting dies 1,100,000 Procurement process activities: 8. Purchasing materials 9. Unloading materials 10. Inspecting materials 11. Moving materials 12. Paying suppliers Total activity cost 500,000 63,000 84,000 100,000 37,000 $ 3,225,000 Unit-level (plantwide) cost assignment Activity cost assignment Driver Engineering hours Development hours Test hours Number of batches Number of change orders Number of moves Number of dies Number of purchase orders Number of receiving orders Inspection hours Distance moved Number of invoices $2,257,500 $1,644,200 $967,500 $1,580,800 Expected Consumption Ratios Wafer A Wafer B 0.25 0.15 0.60 0.55 0.20 0.45 0.70 0.15 0.35 0.65 0.55 0.30 * Calculated using number of dies as the single unit-level driver. b Calculated by multiplying the consumption ratio of each product by the cost of each activity. Required: 0.75 0.85 0.40 0.45 0.80 0.55 0.30 0.85 0.65 0.35 0.45 0.70