Consumption Ratios; Activity Rates

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

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

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

	Scented Cards	Regular Cards
Inspection hours
Setup hours
Machine hours
Number of moves

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

Rates:
Inspecting products	$ per inspection hour
Setting up equipment	$ per setup hour
Machining	$ per machine hour
Moving materials	$ per move

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