18 400 points TB MC Qu. 4-53 Washington, Inc. produces two different product...

Question

18 400 points TB MC Qu. 4-53 Washington, Inc. produces two different product... Washington, Inc. produces two different products (Product C and Product 2) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The cost of Machining is $900,000, while the cost of Inspection is $35,100. The activity drivers are used as follows: Machine hours Number of batches Product CProduct 2 3,100 18 1,400 47 Total 4,500 65 What is the activity rate for Inspection? O $168 per batch $540 per batch O$1,950 per batch O $747 per batch

Explanation / Answer

Activity rate of inspection = Total cost of inspection/Total no of batches

= 35100/65

Activity rate of inspection = 540 per batch

so answer is b) $540 per batch

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