Question

Consumption Ratios Zapato Company produces two types of boots: vaquero and vaquera. There are four activities associated with the two products. Drivers for the four activities are as follows: Vaquero Vaquera Cutting hours 2,190 5,400 Assembly hours 2,850 4,650 Inspection hours 940 2,430 Rework hours 150 450 Required: Calculate the consumption ratios for the four drivers. Round your answers to two decimal places.

Answer 1

Answer:

Explanation:

The formula to compute the consumption ratio is shown below:

Consumption ratio = Activity driver amount ÷ Total amount of activity driver

For Cutting hours

Vaquero = ($2,190) ÷ ($2,190 + $5,400)

               = ($2,190) ÷ ($7,590)

               = 0.29

Vaquera = ($5,400) ÷ ($2,190 + $5,400)

               = ($5,400) ÷ ($7,590)

               = 0.71

For Assembly hours

Vaquero = ($2,850) ÷ ($2,850 + $4,650)

               = ($2,850) ÷ ($7,500)

               = 0.38

Vaquera = ($4,650) ÷ ($2,850 + $4,650)

               = ($4,650) ÷ ($7,500)

               = 0.62

For Inspection Hours

Vaquero = ($940) ÷ ($940 + $2,430)

               = ($940) ÷ ($3,370)

               = 0.28

Vaquera =  ($2,430) ÷ ($940 + $2,430)

               = ($2,430) ÷ ($3,370)

               = 0.72

For Rework hours

Vaquero = ($150) ÷ ($150 + $450)

               = ($150) ÷ ($600)

               = 0.25

Vaquera = ($450) ÷ ($150 + $450)

               = ($450) ÷ ($600)

               = 0.75