Ruby Faces, Inc What Is the Machining Cost for Production of 60,000 Reflectors

question 150

Multiple Choice

Ruby Faces, Inc., has done a cost analysis for the production of reflectors in its factory. The following activities and cost drivers have been developed: $$\begin{array} { l l } \text { Activity } & \frac { \text { Cost Formula } } { } \\\hline \text { Maintenance } & \$ 10,000 + \$ 3 \text { per machine hour } \\\text { Machining } & \$ 40,000 + \$ 2 \text { per machine hour } \\\text { Inspection } & \$ 70,000 + \$ 550 \text { per batch } \\\text { Setups } & \$ 2,000 \text { per batch } \\\text { Purchasing } & \$ 30,000 + \$ 20 \text { per purchase order }\end{array}$$ What is the machining cost for production of 60,000 reflectors that will require 6,000 machine hours, 20 batches, and 15,000 purchase orders?

• A)$40,000
• B)$52,000
• C)$38,000
• D)$60,500

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