Simplifying the ABC System: Equally Accurate Reduced ABC Systems

Selected activities and other information are provided for Patterson Company for its most recent year of operations.

Expected Consumption

Ratios

Activity Driver Quantity Wafer A Wafer B

$7.$ Inserting dies Number of dies $2,400,0000\mathrm{.}70\mathrm{.}3$

$8.$ Purchasing materials Number of purchase

orders $2,9000\mathrm{.}20\mathrm{.}8$

$1.$ Developing test programs Engineering hours $7,5000\mathrm{.}250\mathrm{.}75$

$3.$ Testing products Test hours $19,0000\mathrm{.}60\mathrm{.}4$

ABC assignments $$160,000$ $$160,000$

Total overhead cost $$320,000$

Required:

$1.$ Form reduced system cost pools for activities $7$ and $8.$ Do not round interim calculations. Round your final answers to the nearest dollar.

Inserting dies cost pool $fill in the blank $1$

Purchasing cost pool $fill in the blank $2$

$2.$ Assign the costs of the reduced system cost pools to Wafer A and Wafer B$.$ Do not round interim calculations. Round your final answers to the nearest dollar.

Wafer A $fill in the blank $3$

Wafer B $fill in the blank $4$

$3.$ What if the two activities were $1$ and $3?$ Repeat Requirements $1$ and $2.$

Form reduced system cost pools for activities $1$ and $3.$

Do not round interim calculations. Round your final answers to the nearest dollar.

Developing test programs cost pool $fill in the blank $5$

Testing products cost pool $fill in the blank $6$

Assign the costs of the reduced system cost pools to Wafer A and Wafer B$.$

Wafer A $fill in the blank $7$

Wafer B $fill in the blank $8$