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#2 #3 Larsen, Inc., produces two types of electronic parts and has provided the following data: Part x12 Part YKZ Total 100,000 600,000 Units produced
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Larsen, Inc., produces two types of electronic parts and has provided the following data: Part x12 Part YKZ Total 100,000 600,000 Units produced Direct labor hours 35,000 65,000 100,000 Machine hours 56,000 294,000 350,000 48 72 120 Number of setups Testing hours 1,200 8,800 10,000 Number of purchase orders 480 3,520 4,000 There are four activities: machining, setting up, testing, and purchasing. Required: 1. Calculate the activity consumption ratios for each product. Round your answers to two decimal places. Consumption Ratios Overhead Activity Part X12 Part YK7 Activity Driver Machining Setups Inspecting products all III Purchasing Machine hours Number of setups Purchase orders Testing hours 2. Calculate the consumption ratios for the plantwide rate (direct labor hours). Round your answers to two decimal places. Consumption Ratios Overhead Activity Part x12 Part YK7 Plantwide: Manufacturing Which product is undercosted? 3. If the machine hours were used for the plantwide rate, would this remove the cost distortion of a plantwide rate? Part X12 Part YK7 Yes NoStep by Step Solution
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