13. Use the information from the Magnolia Company and assume that Activity Based Costing is used, with each activity in its own cost pool. What is the rate per inspection that should be used to assign inspection cost to the two products? (15 points)

a.

$8 per inspection

b.

$40 per inspection

c.

$36 per inspection

d.

$400,000 per inspection

Activity

Driver

Total Overhead Cost

Product B546 Usage

Product C245 usage

Set up

# of setups

$200,000

500 setups

1,500 setups

Ordering parts

# of parts

$300,000

60,000 parts

40,000 parts

Machining

machine hours

$600,000

12,000 machine hrs

6,000 machine hours

Inspection

# of inspections

$400,000

10,000 inspections

40,000 inspections

Shipping

# of shipments

$300,000

10,000 shipments

10,000 shipments

Total overhead

$1,800,000