Question

Culver, Inc. produces two different products (Product V3 and Product G8) 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 drivers are used as follows: Product V3Product G8Total Machine hours1,5003,0004,500 Number of batches521971 The activity rate for Machining is $200 per machine hour. What is the total cost of Machining

Answer 1

Answer:

$900,000

Explanation:

Given that,

Activity rate for Machining = $200 per machine hour

Total machine hours = Product V3 + Product G8

                                  = 1,500 + 3,000

                                  = 4,500

Total number of batches = 71

Total cost of Machining:

= Total machine hours × Activity rate for Machining

= 4,500 machine hours × $200 per machine hour

= $900,000