Question

o different activities: Machining, which uses machine hours as Washington, Inc. produces two different products (Product Cand 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 $682,000, while the cost of Inspection is $42,265. The activity drivers are used as follows: Machine hours Number of batches Product C 1,300 55 Product 2 3,100 24 Total 4,400 79 What is the activity rate for Inspection? Multiple Choice $155 per batch O $1,761 per batch O $535 per batch O $768 per batch

Answer 1

Activity rate = Total Overhead/Total allocation base = 42,265/79 = 535 per batch Option C is the answer