Consumption Ratios; Activity Rates Saludable 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 1,080 720 Setup hours 420 180 Machine hours 960 2,880 Number of moves 2,880 720 The following activity data has been collected: Inspecting products $45,000 Setting up equipment 28,500 Machining 30,720 Moving materials 16,200 Required: 1. Calculate the consumption ratios for the four drivers (round to two decimal places). Scented Cards Regular Cards Inspection hours 25.10 0.6 Setup hours Machine hours Number of moves 2. Which of the following statements indicate there is product diversity? 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, cards would receive 25% of the overhead, and cards would receive 75% of the overhead. Yet, the cards consume well over 60% of the non-machine related overhead. Thus, the Scented cards are , and the Regular cards are . 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 to two decimal places). Rates: Inspecting products $ per inspection hour Setting up equipment $ per setup hour Machining $ per machine hour Moving materials $ per move 4. 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 h