Question

Lynwood, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, E and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $140 per machine hour, and the activity rate for Inspection is $560 per batch. The activity drivers are used as follows: Machining, which uses machine hours as an activity driver, Product A 1,400 54 Product X 3,200 E Machine hours Number of batches Total 4,600 72 18 What is the amount of Inspection cost assigned to Product X? Multiple Choice $196,000 $40,320 $10,080 o oo $30,240

Answer 1

Correct answer-----------$10080

Working

Cost assigned to X
Activity name	Activity Rates	Activity	ABC Cost
	(A)	(B)	(A x B)
Inspection	$        560.00	18.00	$ 10,080