Bienestar Company produces two types of get-well cards: scented and regular. Drivers for the four activities are as follows: Line Item Description Scented Cards Regular Cards Inspection hours 130 100 Setup hours 100 30 Machine hours 160 640 Number of moves 235 60 The following activity data has been collected: Line Item Description Amount Inspecting products $5,020 Setting up equipment 4,770 Machining 6,380 Moving materials 1,250 Required: 1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places.Which of the following statements indicate there is product diversity?

fill in the blank 1 of 6

Significant variation in the consumption ratios from driver to driver.Least variation in the consumption ratios from driver to driver.Significant variation in the activities involved in production.Least variation in the activities involved in production.

Explain the significance of product diversity for decision-making if the company chooses to use machine hours to assign all overhead.

If machine hours are used as the only driver, fill in the blank 2 of 6

scentedregular

cards would receive 20% of the overhead, and fill in the blank 3 of 6

scentedregular

cards would receive 80% of the overhead. Yet, the fill in the blank 4 of 6

scentedregular

cards consume well over 57% of the non-machine related overhead. Thus, the Scented cards are fill in the blank 5 of 6

overcostedundercosted

, and the Regular cards are fill in the blank 6 of 6

overcostedundercosted

. This inaccuracy can adversely affect many decisions, including pricing, keep or drop, and cost-volume-profit.

3. Calculate the activity rates that would be used to assign costs to each product. Round your answers to the nearest cent.

Line Item DescriptionActivity rateRates:Inspecting products$fill in the blank 15 per inspection hourSetting up equipment$fill in the blank 16 per setup hourMachining$fill in the blank 17 per machine hourMoving materials$fill in the blank 18 per move

4. Suppose that the budget for inspection is $52,000 for the coming year and that the activity rate for inspecting products is $25 per inspection hour. How many hours of inspection are expected for the coming year? If required, round your answer to nearest whole number of hours. fill in the blank 1 of 1 inspection hours