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Jefferson, Inc. produces two different products (Product 5 and Product Z) using two different activities: Machining, which uses machine hours as an activity driver, and
Jefferson, 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. The activity drivers are used as follows:
Product 5 | Product Z | Total | |
Machine hours | 1,200 | 4,800 | 6,000 |
Number of batches | 60 | 20 | 80 |
What proportion of Inspection activity is used by Product Z?
25%
33%
67%
75%
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