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Bervine, Inc. produces two different products (bompers and woobles) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which
Bervine, Inc. produces two different products (bompers and woobles) 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. Usage of the activity drivers are as follows:
Bompers | Woobles | Total | |
Machine hours | 1,000 | 3,000 | 4,000 |
Number of batches | 45 | 15 | 60 |
What is the activity rate for Inspection?
Select one:
a.
$125 per batch
b.
$500 per batch
c.
$667 per batch
d.
$2,000 per batch
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