Andiamo Manufacturing Produces Two Types of Tablets: Basic and Deluxe

question 73

Multiple Choice

Andiamo Manufacturing produces two types of tablets: basic and deluxe. The tablets are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:
$$\begin{array} { l r r r r } \text { Product } & \text { Machine Hours } & \text { Setups } & \text { Receiving Orders } & \text { Packing Orders } \\\text { basic } & 20,000 & 200 & 100 & 800 \\\text { deluxe } & 20,000 & 500 & 400 & 4,000 \\\text { Costs } & \$ 80,000 & \$ 60,000 & \$ 10,000 & \$ 30,000\end{array}$$
-Refer to the Figure.What is the consumption ratio for setups on the deluxe?

• A)0.500
• B)0.688
• C)0.700
• D)0.714

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Definitions:

Vouchers

Documents serving as evidence for transactions, such as payments or receipts, and authorize the related accounting entries.

Currency

Currency is a system of money in general use in a particular country, facilitating the buying and selling of goods and services.

Cash Shortage

A Cash Shortage occurs when the actual cash on hand is less than the expected amount, often due to errors or theft.

Petty Cash Account

A small amount of cash kept on hand for making minor business expenses, managed through a system of vouchers for tracking.