Question

Witness Manufacturing produces two types of cameras: 35mm and digital. The cameras 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:

Product Machine Hours                 Setups                  Receiving Orders              Packing Orders
35mm                   12,000                              200                                300       500
Digital                    12,000                             450                              1,200       2,500
Costs                     $70,000                    $50,000 $10,000                    $30,000
Calculate the consumption ratio for setups on the digital cameras. (Note: Round answer to two decimal places.)

a		0.56
b		0.80
c		0.45
d		0.69
e		0.50

Answer 1

Answer- The consumption ratio for setups on the digital cameras= 0.69 (Option d).

Explanation- Consumption ratio for setups on the digital cameras = Set ups of digital camera/Total set ups

= 450 setups/650 setups

= 0.69