Question: Zapato Company produces two types of boots: cowboy and cowgirl. There are four activities associated with the two products. Drivers for the four activities are as follows:
Cowboy Cowgirl
Cutting hours 2,100 3,900
Assembly hours 1,500 2,250
Inspection hours 675 1,575
Rework hours 75 225
Consumption Ratios
Refer to the information for Zapato Company above.
Required: 1. Calculate the consumption ratios for the four drivers.
2. Is there evidence of product diversity? Explain.