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 A?

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