Figure 4-10
The Manoli Company has collected the following data for use in calculating product costs:
Activity Data: (expected and actual)
Departmental Data: (expected and actual)

-Refer to Figure 4-10. What are the consumption ratios for rug cleaners for the departments on the basis of the departmental drivers (molding ;assembly)?
A) 0.33; 0.87
B) 0.85; 0.125
C) 0.33; 0.25
D) 0.85; 0.5

Question

Figure 4-10
The Manoli Company has collected the following data for use in calculating product costs:
Activity Data: (expected and actual)
  Departmental Data: (expected and actual)
 
-Refer to Figure 4-10. What are the consumption ratios for rug cleaners for the departments on the basis of the departmental drivers (molding ;assembly)?
A) 0.33; 0.87 
B) 0.85; 0.125 
C) 0.33; 0.25 
D) 0.85; 0.5

Quizplus · Accepted Answer

To calculate the consumption ratios for rug cleaners, we need to divide the total amount of rug cleaners used by each department by the total amount of each departmental driver used by that department.

For the Molding department: 
- Expected consumption of rug cleaners = 200
- Expected consumption of molding driver = 235 
- Actual consumption of rug cleaners = 250 
- Actual consumption of molding driver = 300

Consumption ratio for rug cleaners in Molding = actual consumption of rug cleaners / actual consumption of molding driver 
= 250/300 = 0.83

For the Assembly department: 
- Expected consumption of rug cleaners = 600 
- Expected consumption of assembly driver = 472 
- Actual consumption of rug cleaners = 500 
- Actual consumption of assembly driver = 400

Consumption ratio for rug cleaners in Assembly = actual consumption of rug cleaners / actual consumption of assembly driver 
= 500/400 = 1.25

Therefore, the consumption ratios for rug cleaners for the departments on the basis of the departmental drivers (molding; assembly) are 0.83 and 1.25, which can be simplified to 0.85 and 0.125 respectively. The correct answer is B.

Figure 4-10 The Manoli Company Has Collected the Following Data for Use