22) Zero, Inc. produces two different products (Product 1 and 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 activity drivers are used as follows:

Product 1 Product 2 Total

Machine hours 1,000 3,000 4,000

Number of batches 45 15 60

The activity rate for Machining is $67.50 per machine hour. What is the total cost of Machining?

A) $274,050

B) $67,500

C) $202,500

D) $270,000

23) Zero, Inc. produces two different products (Product 1 and 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 activity drivers are used as follows:

Product 1 Product 2 Total

Machine hours 1,000 3,000 4,000

Number of batches 45 15 60

The activity rate for Inspection is $750 per batch. What is the total cost of Inspection?

A) $11,250

B) $33,750

C) $45,000

D) $75,000

25) Heather, Inc. produces two different products (Product A and Product B) 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 $500,000, while the cost of Inspection is $30,000. Product A uses 20% of total machine hours and 75% of total batches. What is the total Inspection cost assigned to Product A?

A) $7,500

B) $22,500

C) $125,000

D) $375,000

26) Norm, Inc. produces two different products (Product 5 and Product Z) 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 $500,000, while the cost of Inspection is $30,000. Product 5 uses 20% of total machine hours and 75% of total batches. What is the total Machining cost assigned to Product Z?

A) $7,500

B) $22,500

C) $375,000

D) $400,000

27) Karen, Inc. manufactures a product that uses $15 in direct materials and $5 in direct labor per unit. Under the traditional costing system Karen uses, manufacturing overhead applied to each unit is $12. However, Karen is considering switching to an ABC system. Under the ABC system, the total activity cost would be $25. What is the total manufacturing cost per unit for Karen under the ABC system?

A) $20

B) $25

C) $32

D) $45