6. s (Product C and Product 2) using two different activities Machining, which u

Question

6. s (Product C and Product 2) using two different activities Machining, which uses machine hours as an . The cost of Machining is $945,000, while the cost of Inspection is Washington, Inc. produces two different products (Product C and Product 2) using two different actvities Machining activity driver, and Inspection, which uses number of batches as an activity driver $37.370 The activity drivers are used as follows Machine hours Number of batches Product C 1,900 53 Product 2 3,500 21 Total 5,400 74 What is the activity rate for Inspection? O $175 per batch O $505 per batch O $1780 per batch O $705 per batch Type here to

Explanation / Answer

Activity cost driver rate

= Budgeted cost / Budgeted activity

Activity for Inspection is Number of batches that is 74 and cost for Inspection is $37,370

So, Activity cost driver rate

= $37,370 / 74

= $505 per batch

So, as per above calculations, option B is the correct option

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