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Homework answers / question archive / Washington, Inc
Washington, Inc. produces two different products (Product C and Product 2) 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 $750,000, while the cost of Inspection is $90,000. The activity drivers are used as follows:
Machine hours Number of batches
Product C Product 2 Total 1,000 3,000 4,000 45 15 60
What is the activity rate for Machining? Multiple Choice O$5750_00 per machine hour
Computation of Activity Rate of Machining
Activity Rate of Machining = Total Cost of Machining/Total Number of Machine Hours
= $750,000/4,000
Activity rate of inspection = $187.50 per machine hour
