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

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).
2. Is there evidence of product diversity? Explain the significance of product diversity for decision making if the company chooses to use machine hours to assign all overhead.
3. Calculate the activity rates that would be used to assign costs to each product (round to two decimal places).
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?

Transcribed Image Text:

Scented Cards 180 70 160 480 Regular Cards Inspection hours Setup hours Machine hours Number of moves 121) 480 120