Lynwood, Inc

Multiple Choice

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: What is the amount of Inspection cost assigned to Product X?

A) $7,500
B) $22,500
C) $30,000
D) $125,000