Jefferson, Inc. produces two different products (Product 5 and Product Z) 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 $500,000, while the cost of Inspection is $30,000. The activity drivers are used as follows: What proportion of Machining activity is used by Product Z?
A) 25%
B) 33%
C) 67%
D) 80%

Question

Jefferson, Inc. produces two different products (Product 5 and Product Z) 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 $500,000, while the cost of Inspection is $30,000. The activity drivers are used as follows:  What proportion of Machining activity is used by Product Z?
A) 25% 
B) 33% 
C) 67% 
D) 80%

Quizplus · Accepted Answer

The Answer of Jefferson, Inc. produces two different products (Product 5 and Product Z) 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 $500,000, while the cost of Inspection is $30,000. The activity drivers are used as follows:  What proportion of Machining activity is used by Product Z?
A) 25% 
B) 33% 
C) 67% 
D) 80%