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 $141,000 Number of setups 120 Ordering materials 24,000 Number of orders 1,200 Machining 105,000 Machine hours 8,750 Receiving 26,280 Receiving hours 1,095 Silven produces two models of cell phones with the following expected activity demands: Model Y Model X X 4,200 8,400 Units completed Number of setups 80 40 400 800 Number of orders Machine hours Receiving hours 5,000 3,750 365 730 Required: 1. Determine the total overhead assigned to each product using the four activity drivers. Total Overhead Assigned Model X $ 170,760 Model Y 125,520 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 185,476 X Model Y 3. Using ABC as the benchmark, calculate the percentage error. Round your answers to two decimal places. Percentage Error Model X % Model Y %

Answer 1

Answeni 1) Activity Exepected Activity cost per Activity cost capacity 262801 1095 Settingup.activity 14.000 1.20 1175 pea setup ordeding materia 2000 1200 Qoper goderis Machining 105000 8750 | 12 pes machine ho.com Receiving 21 per secdiving her cost peos Activity, Eatpected cost Activity capacity for da obol. Activity is cast perd Model Total Modely Total Activity X poveshead loverhead 1.0181 Setting up activity 1015 80_94000| 40|47000 codering materid 20° 400 8000 800 1600 134 Machining ars| 12 5000 60000 3150 45000 sia Receiving Q4 365 8160 4401600 125520 130 14520 16. Total overhead = cost.per Activity xModely Total oveahead a cestpea Activity 'x Modely Anduo 04 voyla Tokal overhead Assigned 1 Model Modely 70160 125.5.20

Setting up equipment 141000 11111000/141000105000)x24000+2b280 14100044100/16000JX 50.80 21000 2169819 Machining 105000+[C105000/1050004141000)x( 34.000+2b280)] + 105000+ [C105000|246000))*50280 : 126,461 Activity Activity cost scale Setting up 169819 1415:16 equipment Louisetup Machining 126,461 8150 14:45 Degimoch-how Quantity, Overhead 1202 Modely Modely 113013 56606 Setling up equipment 1415716x 80 14.15-16x 40 Machining 14:415X 5000 14.45X 3750 Total 12250 54.188 LIO 194. 185,463 Model X Modely Total overhead Assigned 185463 110194

© 3 Modelx 18546.3-170760 14703 .008b1X100 1707bo 170160 Modelx: 8.614 Modely z 1104941-125520 = (14726) = (0.1113) 125520 125520 Model y 2-11-137 Modely Percentage Fourcon 8.617 -11.737 Modely
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