Approximately Relevant ABC Silven Company has identified the following overhead
ID: 2557196 • Letter: A
Question
Approximately Relevant ABC
Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year:
Activity Expected Costs 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.
Total Overhead assigned:
Model X:
Model Y:
2. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatvely inexpensive activities to the two expensive activities in proportion to their costs. Round interim calculation to 2 decimal places and then round your final answers to the nearest whole dollar.
Total Overhead assigned
Model X:
Model Y:
3. Using ABC as the benchmark, calculate the percentage error. Enter as a one-decimal percent, e.g. .0975 should enter as 9.8.
Percentage Error
Model X:
Model Y:
Explanation / Answer
1. Determine the total overhead assigned to each product using the four activity drivers.
Total Overhead assigned:
Model X:171000
Model Y129000
working:-
overhead driver per unit 126000 150 840 18000 900 20 x y 126000 10500 12 84000 42000 30000 1250 24 6000 12000 300000 72000 54000 9000 21000 171000 129000Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.