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Consumption Ratios; Activity Rates Bienestar Company produces two types of get - well cards: scented and regular. Drivers for the four activities are as follows:
Consumption Ratios; Activity Rates
Bienestar Company produces two types of getwell cards: scented and regular. Drivers for the four activities are as follows:
tableScented Cards,Regular CardsInspection hours,Setup hours,Machine hours,Number of moves,
The following activity data has been collected:
Inspecting products
$
Setting up equipment
Machining
Moving materials
Required:
Calculate the consumption ratios for the four drivers. Round your answers to two decimal places.
Inspection hours
Setup hours
Machine hours
Number of moves
Which of the following statements indicate there is product diversity?
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Inspection hours
Setup hours
Machine hours
Number of moves
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 decisionmaking if the company chooses to use machine hours to assign all overhead.
If machine hours are used as the only driver, scented cards would recelve of the overhead, anc cards would receive of the overhead. Yet, the cards consume well over of the nonmachine related overhead. Thus, the Scented cards ar and the Regular cards are : This inaccuracy can adversely affect many decisions, including pricing, keep or drop, and costvolumeprofit.
Calculate the activity rates that would be used to assign costs to each product. Round your answers to the nearest cent.
Rates:
tableInspecting products,$per inspection hourSetting up equipment,$per setup hourMachining$per machine hourMoving materials,$per move
Suppose that the budget for inspection is $ for the coming year and that the activity rate for inspecting products is $ 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
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