Approximately Relevant ABC Silven Company has identified the following overhead activities, costs, and activity drivers for...
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Approximately Relevant ABC Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Setting up equipment Ordering materials Machining Receiving Expected Cost Activity Driver Activity Capacity $141,000 Number of setups 120 19,800 Number of orders 900 103,950 Machine hours 11,550 16,470 Receiving hours 915 Silven produces two models of cell phones with the following expected activity demands: Model X Model Y Units completed 5,400 10,800 Number of setups 80 40 Number of orders 300 600 Machine hours 6,600 4,950 Receiving hours 305 610 Required: 1. Determine the total overhead assigned to each product using the four activity drivers. Total Overhead Assigned Model X $ Model Y 165,490 115,730 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 281,220 X 171,131.25 X Model Y 3. Using ABC as the benchmark, calculate the percentage error. Round your answers to two decimal places. Model X Model Y Percentage Error % % Approximately Relevant ABC Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Setting up equipment Ordering materials Machining Receiving Expected Cost Activity Driver Activity Capacity $141,000 Number of setups 120 19,800 Number of orders 900 103,950 Machine hours 11,550 16,470 Receiving hours 915 Silven produces two models of cell phones with the following expected activity demands: Model X Model Y Units completed 5,400 10,800 Number of setups 80 40 Number of orders 300 600 Machine hours 6,600 4,950 Receiving hours 305 610 Required: 1. Determine the total overhead assigned to each product using the four activity drivers. Total Overhead Assigned Model X $ Model Y 165,490 115,730 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 281,220 X 171,131.25 X Model Y 3. Using ABC as the benchmark, calculate the percentage error. Round your answers to two decimal places. Model X Model Y Percentage Error % %
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Related Book For
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
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