Figure 4-21 Jones Manufacturing Uses an Activity-Based Costing System

Multiple Choice

Figure 4-21 Jones Manufacturing uses an activity-based costing system.The company produces Model X and Model Y.Information relating to the two products is as follows:
The following overhead costs are reported for the following activities of the production process:
Jones manufacturing has used activity based costing to assign costs to Models X and Y as given in the table below:
Jones Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment.
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Refer to Figure 4-21.Using ABC as the benchmark, What is the percentage error in the cost assigned to Model Y using the approximately relevant ABC approach? (round to 4 decimal places)

A) 0.25%
B) 0.12%
C) 1.2%
D) 2.5%