Question - 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. 0.48
b. 0.90
c. 0.25
d. 0.45
e. 0.75