Reference no: EM132857158

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

Activity	Expected	Cost Activity Driver	Activity Capacity
Setting up equipment	$126,000	Number of setups	150
Ordering materials	18,000	Number of orders	900
Machining	126,000	Machine hours	10,500
Receiving	30,000	Receiving hours	1,250

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

	Model X	Model Y
Units completed	5,000	10,000
Number of setups	100	50
Number of orders	300	600
Machine hours	6,000	4,500
Receiving hours	375	875

Required -

1. Determine the total overhead assigned to each product using the four activity drivers.

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. In your calculations round interim calculations to the nearest cent and round your final answers to the nearest dollar.

3. Using ABC as the benchmark, calculate the percentage error. Round your answers to one decimal place.