Silver Faces, Inc What Is the Budgeted Inspection Cost If There Was Production

question 151

Multiple Choice

Silver Faces, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed: $$\begin{array} { l l } \text { Activity } & \text { Cost Formula } \\\text { Maintenance } & \$ 15,000 + \$ 4 \text { per machine hour } \\\text { Machining } & \$ 35,000 + \$ 1 \text { per machine hour } \\\text { Inspection } & \$ 60,000 + \$ 750 \text { per batch } \\\text { Setups } & \$ 1,000 \text { per batch } \\\text { Purchasing } & \$ 50,000 + \$ 10 \text { per purchase order }\end{array}$$ What is the budgeted inspection cost if there was production of 50,000 reflectors that will require 8,000 machine hours, 25 batches, and 15,000 purchase orders?

• A)$18,750
• B)$60,000
• C)$66,000
• D)$78,750

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