Lufthansa, Inc. uses two different carriers (Airbus and Boeing) and allocated costs with two different...
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Lufthansa, Inc. uses two different carriers (Airbus and Boeing) and allocated costs with two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of round trips as an activity driver. The activity rate for Machining is $180 per machine hour, and the activity rate for Inspection is $540 per batch. The activity drivers are used as follows:
Airbus
Boeing
Total
Machine hours
1,400
3,100
4,500
Number of round trips
47
18
65
What is the amount of Inspection cost assigned to Airbus?
Multiple Choice
$25,380
$35,100
$252,000
$9,720
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