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Hamilton, Inc. produces two different products (Product 5 and Product Z) using two different activities: Machining, which uses machine hours as an activity driver, and
Hamilton, 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. Usage of the activity drivers are as follows: Product Product 5 Z Total Machine hours 1,200 4,800 6,000 Number of batches 60 20 80 What proportion of Machining activity is used by Product 5? 75% 20% 33% 67%
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