Question

Lynwood, Inc. produces two different products (Product A and Product X) 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 activity rate for Machining is $150 per machine hour, and the activity rate for Inspection is $560 per batch. The activity drivers are used as follows: Product A Product X Total Machine hours 1,800 3,000 4,800 Number of batches 53 21 74 What is the amount of Machining cost assigned to Product A?

Answer 1

Answer: $450,000

Step-by-step explanation:

From the question, we are told that the activity rate for Machining is $150 per machine hour, and the activity rate for Inspection is $560 per batch and that Product X has machine hours of 3,000.

Machining cost assigned to poduct X will be gotten by multiplying the machine hours by the activity rate per machine hour. This will be:

= 3000 × $150

= $450,000