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 130 80 Setup hours 80 10 Machine hours 210 550 Number of moves 210 80 The following activity data has been collected: Inspecting products $5,100 Setting up equipment 4,660 Machining 6,490 Moving materials 1,340 Required: 1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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 | 130 | 80 | ||
| Setup hours | 80 | 10 | ||
| Machine hours | 210 | 550 | ||
| Number of moves | 210 | 80 |
The following activity data has been collected:
| Inspecting products | $5,100 |
| Setting up equipment | 4,660 |
| Machining | 6,490 |
| Moving materials | 1,340 |
Required:
1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places.
Part 1 )
| Statement of Consumption Ratio for Cost Drivers | |||||
| Cost Drivers | Scented Card | Regualar Cards | Total | %age of Scented Card | %age of Scented Card |
| Inspection hours | 130 | 80 | 210 | 0.62 | 0.38 |
| Setup hours | 80 | 10 | 90 | 0.89 | 0.11 |
| Machine hours | 210 | 550 | 760 | 0.28 | 0.72 |
| Number of moves | 210 | 80 | 290 | 0.72 | 0.28 |
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