The Manoli Company Has Collected the Following Data for Use

question 64

Multiple Choice

The Manoli Company has collected the following data for use in calculating product costs: Activity Data: (expected and actual) $$\begin{array} { | l | l | l | l | } \hline & \text { Rug Cleaners } &{ \text { Sweepers } } & \text { T otal } \\\hline \text { Units Produced } & 50,000 & 250,000 & 300,000 \\\hline \text { Prime Costs } & \$ 200,000 & \$ 750,000 & \$ 950,000 \\\hline \text { Direct Labor Hours } & 10,000 & 40,000 & 50,000 \\\hline \text { Machine Hours } & 20,000 & 10,000 & 30,000 \\\hline \text { Number of Setups } & 25 & 75 & 100 \\\hline \text { Inspection Hours } & 1200 & 2,800 & 4,000 \\\hline \text { Number of Moves } & 140 & 210 & 350 \\\hline\end{array}$$
Departmental Data: (expected and actual)
$$\begin{array} { | l | l | l | l| } \hline & { \text { Molding } } & \text { Assembly } & { \text { Total } } \\\hline \text { Direct Labor Hours } & & & \\\hline \text { Rug Cleaners } & 5,000 & 5,000 & 10,000 \\\hline \text { Sweepers } & & & \\\hline \text { Total } & 10,000 & 40,000 & 50,000 \\\hline \text { Machine Hours } & & & \\\hline \text { Rug Cleaners } & 17,000 & 3,000 &20,000 \\\hline \text { Sweepers } & 3,000 & 7,000 & 10,000\\\hline \text { Total } & 20,000 & 10,000 & 30,000 \\\hline \text { Overhead Costs } & & & \\\hline \text { Machining } & \$ 120,000 & \$ 30,000 & \$ 150,000 \\\hline \text { Moving Materials } & 40,000 & 30,000 &70,000\\\hline { \text { Setting Up } } & 70,000 & 10,000 & 80,000 \\\hline \text { Inspecting Products } & 20,000 & 30,000 & 50,000 \\\hline \text { Total } & \$ 250,000 & \$ 100,000 &\$350,000 \\\hline\end{array}$$ What are the consumption ratios for rug cleaners and sweepers respectively for the inspection of products activity?

• A)0.3; 0.7
• B)0.2; 0.8
• C)0.4; 0.6
• D)0.67; 0.33

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Definitions:

Waste

Any unusable materials or substances involved in a process which are produced as a by-product and often require disposal.

Processing Time

The duration required to complete a particular process or activity, often used in manufacturing and operational analysis.

Unit-level Activities

Activities in cost accounting that vary with the number of units produced, such as operating machinery for each unit.

Departmental Unit

A division within an organization with specific responsibilities, often based on function, product line, or geographical area.