Jefferson, Inc

Multiple Choice

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: What proportion of Machining activity is used by Product 5?

A) 20%
B) 33%
C) 67%
D) 75%