Consumption Ratios; Activity Rates Bienestar Company produces two types of get-w

Question

Consumption Ratios; Activity Rates

Bienestar Company produces two types of get-well cards: scented and regular. Drivers for the four activities are as follows:

The following activity data have been collected:

Required:

1. Calculate the consumption ratios for the four drivers (round to two decimal places).

2. Calculate the activity rates that would be used to assign costs to each product (round to two decimal places).

3. Suppose that the activity rate for inspecting products is $20 per inspection hour. How many hours of inspection are expected for the coming year?
inspection hours

Scented Cards Regular Cards Inspection hours 180 120 Setup hours 70 30 Machine hours 160 480 Number of moves 480 120

Explanation / Answer

Scented Cards Regular Cards Total Inspection hours 180 120 300 Setup hours 70 30 100 Machine hours 160 480 640 Number of moves 480 120 600 The following activity data have been collected: Inspecting products $7,500 Setting up equipment 4,750 Machining 5,120 Moving materials 2,700 Required: 1. the consumption ratios for the four drivers (round to two decimal places). Scented Cards Regular Cards Inspection hours 0.6 0.4 120/300 Setup hours 0.7 0.3 Machine hours 0.25 0.75 Number of moves 0.8 0.2 Ans 2 Rates: Inspecting products $ per inspection hour $7500/300 25 Setting up equipment $ per setup hour $4750/100 47.5 Machining $ per machine hour $5120/640 8 Moving materials $ per move 2700/600 4.5 3) when 300 hours were there than the rate was $25 per hour so when it is $ 20 than no. of ispection hours 300/20*25 375 or $7500/20= 375 hours

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