A company has two inspectors, each earning a salary of $150,000. One inspector works exclusively on inspecting parts received from outside suppliers, while the other spends 40% of her time inspecting parts and 60% of her time inspecting final products. How much labour cost should be assigned to the activity of inspecting parts?
A) $60,000
B) $90,000
C) $210,000
D) $300,000

Question

Quizplus · Accepted Answer

The first inspector's entire salary ($150,000) is assigned to inspecting parts. The second inspector spends 40% of her time on inspecting parts, so 40% of her salary ($150,000 * 0.4 = $60,000) is also assigned to inspecting parts. Therefore, the total labor cost assigned to inspecting parts is $150,000 + $60,000 = $210,000.

A Company Has Two Inspectors, Each Earning a Salary of $150,000