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n Question 7 2 pts Lo Tech Inc. makes 2 distinct products, Inspire and Workhorse. The company uses an activity-based costing (ABC) system. Information
n Question 7 2 pts Lo Tech Inc. makes 2 distinct products, Inspire and Workhorse. The company uses an activity-based costing (ABC) system. Information that relates to the company is presented below. Inspire Workhorse Total units 300,000 800,000 produced Number of units per batch 6,000 12,500 Total overhead $X $Y cost per unit Batch-level Overhead Costs: Total batch level overhead cost: $7,000,000 Batch level overhead cost is made up entirely of machine set up cost (e.g., the cost incurred to clean the machine, check machine functionality, conduct test runs) which is incurred before a batch of output is produced. The more machine set ups required, the higher the total batch level overhead cost. Each machine set up (irrespective of whether it relates to Inspire or Workforce) costs the same amount. Unit-level Overhead Costs Total unit-level overhead costs: $5,000,000 Total overhead costs: $7,000,000+ $5,000,000 = $12,000,000 The value of $X i.e., Inspire's total overhead cost per unit is closest to: $17.50 O $14.80 $10.90 $8.90 $16.20
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