Homework Help is Here – Start Your Trial Now!
Business
Accounting
Consumption Ratios; Activity Rates Bienestar 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 Setup hours Machine hours Number of moves 140 70 Inspection hours Setup hours 210 225 The following activity data has been collected: Inspecting products Setting up equipment Machining Moving materials Required: 70 10 570 Scented Cards 85 $4,940 4,720 6,350 1,440 1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places. Regular Cards 0.6

Consumption Ratios; Activity Rates Bienestar 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 Setup hours Machine hours Number of moves 140 70 Inspection hours Setup hours 210 225 The following activity data has been collected: Inspecting products Setting up equipment Machining Moving materials Required: 70 10 570 Scented Cards 85 $4,940 4,720 6,350 1,440 1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places. Regular Cards 0.6

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Owe

Consumption Ratios; Activity Rates Bienestar 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 Setup hours Machine hours Number of moves 140 70 Inspection hours Setup hours 210 225 The following activity data has been collected: Inspecting products Setting up equipment Machining Moving materials Required: 70 10 570 Scented Cards 85 $4,940 4,720 6,350 1,440 1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places. Regular Cards 0.6
Transcribed Image Text:Consumption Ratios; Activity Rates Bienestar 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 Setup hours Machine hours Number of moves 140 70 Inspection hours Setup hours 210 225 The following activity data has been collected: Inspecting products Setting up equipment Machining Moving materials Required: 70 10 570 Scented Cards 85 $4,940 4,720 6,350 1,440 1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places. Regular Cards 0.6
Setup hours UQ 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. Machine hours Number of moves If machine hours are used as the only driver, scented cards would receive 27% of the overhead, and regular cards would receive 73% of the overhead. Yet, the scented cards consume well over 67% of the non-machine related overhead. Thus, the Scented cards are undercosted This inaccuracy can adversely affect many decisions, including pricing, keep or drop, and cost-volume-profit. the Regular cards are overcosted 3. Calculate the activity rates that would be used to assign costs to each product. Round your answers to the nearest cent. Rates: Inspecting products Setting up equipment Machining Moving materials $ $ 000 $ $ per inspection hour per setup hour per machine hour per move , and 4. Suppose that the budget for inspection is $51,000 for the coming year and that the activity rate for inspecting products is $25 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
Transcribed Image Text:Setup hours UQ 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. Machine hours Number of moves If machine hours are used as the only driver, scented cards would receive 27% of the overhead, and regular cards would receive 73% of the overhead. Yet, the scented cards consume well over 67% of the non-machine related overhead. Thus, the Scented cards are undercosted This inaccuracy can adversely affect many decisions, including pricing, keep or drop, and cost-volume-profit. the Regular cards are overcosted 3. Calculate the activity rates that would be used to assign costs to each product. Round your answers to the nearest cent. Rates: Inspecting products Setting up equipment Machining Moving materials $ $ 000 $ $ per inspection hour per setup hour per machine hour per move , and 4. Suppose that the budget for inspection is $51,000 for the coming year and that the activity rate for inspecting products is $25 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
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 6 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Quality control
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS