Alpha Technology produces two products: a high end laptop under the label Excellent Laptops and an inexpensive desktop under the label Outstanding Computers. The two products use two overhead activities, with the following costs:
Setting up equipment $3,000
Machining $15,000
The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production.
Excellent Laptops Outstanding Computers
Direct Labor $25,000 $10,000
Direct Materials $20,000 $5,000
Expected Production
in Units 3,000 3,000
Machine Hours 850 2,000
Setup Hours 80 75
Calculate Outstanding Computer's consumption ratio for setup hours.
a. 0.45.
b. 0.90.
c. 0.75.
d. 0.48.
e. 0.25.
Answers: 3
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