Consumption Ratios; Activity Rates Bienestar Company produces two types of get-well cards: scented and regular. Drivers for the four activities are as follows: Regular Cards Inspection hours Setup hours Machine hours Number of moves Scented Cards 140 90 90 10 160 640 210 85 The following activity data has been collected: Inspecting products Setting up equipment Machining Moving materials. Required: $5,100 4,710 6,490 1,450 1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places. Inspection hours Setup hours Scented Cards Regular Cards 0.61V 0.39 x Machine hours Number of moves 2. Which of the following statements indicate there is product diversity? Significant variation in the consumption ratios from driver to driver. 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, scented receive 80% of the overhead. Yet, the scented cards are undercosted cards would cards consume well over 61% of the non-machine related overhead. Thus, the Scented , and the Regular cards are overcosted This inaccuracy can adversely affect many decisions, including cards would receive 20% of the overhead, and regular 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. Rates: Inspecting products per inspection hour Setting up equipment per setup hour Machining Moving materials per machine hour per move 4. Suppose that the budget for inspection is $56,000 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. inspection hours