Answer:
$450
Explanation:
Activity based costing is the process by which a business allocates cost on the basis of the number of times an activity is carried out.
For example if different departments use a photocopier to copy 3,000, 5,000, and 2,000 sheets. The total cost will be allocated based on amount of activity per department.
In this instance
Total number of boards= 36,000
Inspections= 5% of the total
Inspection cost= $15 per hour
Percentage that will be inspected= 0.05 * 36,000 = $1,800
It takes one minute to inspect each board, there are 60 minutes in one hour. So 60 boards are inspected in one hour.
Number of inspection hours= 1,800 ÷ 60= 30 hours
Total cost of inspection= Cost per hour * Number of hours
Total cost of inspection= 15 * 30= $450
