Question

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 $107,800, while the cost of Inspection is $38,280. Usage of the activity drivers are as follows:

Product 5 Product Z Total
Machine hours 1,078 3,822 4,900
Number of batches 49 17 66
What proportion of Machining activity is used by Product 5?
a. 70%
b. 78%
c. 22%
d. 30%

Answer 1

Product 5 uses 22% of the Machining activity, calculated by dividing Product 5's machine hours by the total machine hours and multiplying by 100. The correct answer is c. 22%.

Step-by-step explanation:

The question is asking for the proportion of the Machining activity that is used by Product 5. To calculate this, we take the machine hours used by Product 5 and divide it by the total machine hours for both products.

The calculation is 1,078 machine hours (Product 5) divided by 4,900 total machine hours. To find the proportion of Machining activity used by Product 5, we need to divide the machine hours used by Product 5 by the total machine hours used by both products. Product 5 uses 1,078 machine hours out of a total of 4,900 machine hours.

The proportion is then calculated as follows:

(1,078 hours / 4,900 hours) × 100 = 22%

This means that Product 5 uses 22% of the total Machining activity. Therefore, the correct answer is c. 22%.