Gladmark company produces two types of get well cards scented and regular drivers for the four activities as follows:

Scented Regular

Inspection hours 40 160

Set up hours 50 50

Machine hours 200 600

Number of moves 225 75

1. Calculate the consumption ratios for the four drivers
Is there evidence of product diversity? Explain

Referring to the data above the following data has been calculated

Inspecting products 2000
Setting up equipment 2,500
Machining 4000
Moving materials 900

1. Calculate the activity rates that would be used to assign cost to each product

2. Suppose the activity rate for inspecting products is $20 per inspection hour how many hours of inspection are expected for the coming year

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To calculate the consumption ratios for the four drivers, we need to divide the total activity for each driver by the total activity for all products combined.

First, let's calculate the total activity for each driver:

- Inspection hours: 40 + 160 = 200
- Set up hours: 50 + 50 = 100
- Machine hours: 200 + 600 = 800
- Number of moves: 225 + 75 = 300

Next, we calculate the total activity for all products combined:

Total activity = Inspecting products + Setting up equipment + Machining + Moving materials
Total activity = 2000 + 2500 + 4000 + 900
Total activity = 9400

Now we can calculate the consumption ratios:

- Consumption ratio for inspection hours = Inspection hours / Total activity = 200 / 9400
- Consumption ratio for set up hours = Set up hours / Total activity = 100 / 9400
- Consumption ratio for machine hours = Machine hours / Total activity = 800 / 9400
- Consumption ratio for number of moves = Number of moves / Total activity = 300 / 9400

To determine if there is evidence of product diversity, we need to compare the consumption ratios. If the consumption ratios for the different drivers vary significantly, then there is evidence of product diversity. However, if the consumption ratios are similar, it indicates that the different products have similar consumption of resources.

Now, to calculate the activity rates that would be used to assign cost to each product, we multiply the consumption ratios by the expected activity for each product.

For example, let's calculate the activity rate for inspecting products:

Activity rate for inspecting products = Consumption ratio for inspection hours * Expected activity for inspecting products
Activity rate for inspecting products = (200 / 9400) * 2000

Similarly, we can calculate the activity rates for setting up equipment, machining, and moving materials by using their respective consumption ratios and expected activities.

To answer the second question, if the activity rate for inspecting products is $20 per inspection hour, we can calculate the expected number of inspection hours for the coming year by using the activity rate and the expected activity for inspecting products:

Expected inspection hours = Expected activity for inspecting products / Activity rate for inspecting products

Hope this helps! Let me know if you have any further questions.