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 $750,000, while the cost of Inspection is $90,000. The activity drivers are used as follows: What is the activity rate for Inspection?
A) $45,000 per batch
B) $1,500 per batch
C) $6,000 per batch
D) $2,000 per batch

Question

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 $750,000, while the cost of Inspection is $90,000. The activity drivers are used as follows:  What is the activity rate for Inspection?
A) $45,000 per batch 
B) $1,500 per batch 
C) $6,000 per batch 
D) $2,000 per batch

Quizplus · Accepted Answer

The Answer of 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 $750,000, while the cost of Inspection is $90,000. The activity drivers are used as follows:  What is the activity rate for Inspection?
A) $45,000 per batch 
B) $1,500 per batch 
C) $6,000 per batch 
D) $2,000 per batch