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 80 140 Setup hours 80 20 Machine hours 200 600 Number of moves 220 80 The following activity data has been collected: Inspecting products $5,030 Setting up equipment 4,760 Machining 6,460 Moving materials 1,400 Required: 1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places. Scented Cards Regular Cards Inspection hours 0.63 X 0.36 Setup hours 0.8 0.2 Machine hours 0.2 X 0.8 X Number of moves 0.73 0.27 2. Which of the following statements indicate there is product diversity? Scented Cards Regular Cards Inspection hours 0.63 X 0.36 Setup hours 0.8 0.2 Machine hours 0.2 X 0.8 X Number of moves 0.73 0.27 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. of machine hours are used as the only driver, scented cards would receive 25% of the overhead, and regular cards would receive 75% of the overhead. Yet, the scented cards consume well over 64% of the non-machine related overhead. Thus, the Scented cards are undercosted and the Regular cards are overcosted 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 apswers to the nearest cent. Rates: Inspecting products 22.86 per inspection hour Setting up equipment 47.6 per setup hour Machining 48.07 X per machine hour Moving materials 4.66 X 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? If required, round your answer to nearest whole number of hours 252 Inspection hours Check My Work 2 more Cho My Worming All work saved