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Approximately Relevant ABC

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	17,100		Number of orders		900
Machining	72,800		Machine hours		9,100
Receiving	18,480		Receiving hours		1,155

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

		Model X		Model Y
Units completed		4,500		9,000
Number of setups		80		40
Number of orders		300		600
Machine hours		5,200		3,900
Receiving hours		385		770

Required:

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

	Total Overhead Assigned
Model X	$ 147,460
Model Y	$ 101,920

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	$_____
Model Y	$______

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

	Percentage Error
Model X	7.26 %
Model Y	___ %

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