Answer:
Inspection costs allocated= $12,250
Explanation:
Giving the following information:
The cost of Machining is $255,000, while the cost of Inspection is $35,000. Product 5 uses 33% of total machine hours and 65% of total batches.
<u>First, we need to determine the allocation rate of Inspection for Product Z:</u>
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Allocation rate Product Z= 1 - Product 5 use of batches
Allocation rate Product Z= 1 - 0.65
Allocation rate Product Z= 0.35
<u>Now, we can allocate Inspection costs:</u>
Inspection costs allocated= 35,000*0.35
Inspection costs allocated= $12,250