Felicidad 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:
Inspecting products .........$ 5,000
Setting up equipment .........4,750
Machining ..............6,400
Moving materials ...........1,350
Required:
1. Calculate the consumption ratios for the four drivers.
2. Is there evidence of product diversity? Explain the significance of product diversity for decision making if the company chooses to use machine hours to assign all overhead.
3. Calculate the activity rates that would be used to assign costs to each product.
4. Suppose that the activity rate for inspecting products is $ 20 per inspection hour. How many hours of inspection are expected for the coming year?

Transcribed Image Text:

Inspection hours Setup hours Machine hours Number of moves Scented Cards 120 80 200 225 Regular Cards 80 20 600 75