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 $125 per machine hour, and the activity rate for Inspection is $500 per batch. The activity drivers are used as follows: Product AProduct XTotalMachine hours1,0003,0004,000Number of batches451560What is the amount of Inspection cost assigned to Product A?
A. $7,500
B. $30,000
C. $22,500
D. $125,000
Answer: C
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