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 $500,000, while the cost of Inspection is $30,000. The activity drivers are used as follows:
Product 5 Product Z Total
Machine hours 1,200 4,800 6,000
Number of batches 60 20 80
What proportion of Inspection activity is used by Product Z?
25%
33%
67%
75%