Consumption Ratios Larsen, Inc., produces two types of electronic parts and has provided the following data: Part X12 Part YK7 Total Units produced 100,000 600,000 Direct labor hours 35,000 65,000 100,000 Machine hours 52,500 297,500 350,000 Number of setups 36 84 120 Testing hours 1,000 9,000 10,000 Number of purchase orders 480 3,520 4,000 There are four activities: machining, setting up, testing, and purchasing.

Consumption Ratios Larsen, Inc., produces two types of electronic parts and has provided the following data: Part X12 Part YK7 Total Units produced 100,000 600,000 Direct labor hours 35,000 65,000 100,000 Machine hours 52,500 297,500 350,000 Number of setups 36 84 120 Testing hours 1,000 9,000 10,000 Number of purchase orders 480 3,520 4,000 There are four activities: machining, setting up, testing, and purchasing. Required: 1. Calculate the activity consumption ratios for each product. Round your answers to two decimal places. Consumption Ratios Overhead Activity Part X12 Part YK7 Activity Driver Machining Setups Machine hours Inspecting products Number of setups Purchasing Purchase orders Testing hours 2. Calculate the consumption ratios for the plantwide rate (direct labor hours). Round your answers to two decimal places. Consumption Ratios Overhead Activity Part X12 Part YK7 Plantwide: Manufacturing Which product is undercosted? 3. If Part X12 he hours were used for the plantwide rate, would this remove the cost distortion of a plantwide rate? Part YK7