Question

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 140 60 Setup hours 60 20 Machine hours 180 650 Number of moves 230 60 The following activity data has been collected: Inspecting products $5,100 Setting up equipment 4,690 Machining 6,490 Moving materials 1,440 Required: 1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places.

Answer 1

Answer:

Consumption ratios for the four drivers in relation to both the cards will be consumption for a particular card/total consumption for both the cards which will be as follows :-

Total consumption for Inspection = 140 + 60

                                                        = 200

Total consumption for Setup = 60 + 20

                                                = 80

Total consumption for Machine = 180 + 650

                                                     = 830

Total consumption for Number of moves = 230 + 60

                                                                    = 290

Hence,

Consumption ratios for Inspection hours:

Scented Cards = $\frac{140}{200}$

                         = 0.7

Regular Cards = $\frac{60}{200}$

                         = 0.3

Consumption ratios for Setup hours:

Scented Cards = $\frac{60}{80}$

                         = 0.75

Regular Cards = $\frac{20}{80}$

                         = 0.25

Consumption ratios for Machine hours:

Scented Cards = $\frac{180}{830}$

                         = 0.22

Regular Cards = $\frac{650}{830}$

                         = 0.78

Consumption ratios for Number of moves:

Scented Cards = $\frac{230}{290}$

                         = 0.79

Regular Cards = $\frac{60}{290}$

                         = 0.21