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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Definitions:

Fossil Fuels

Natural fuels formed from the remains of living organisms over millions of years, including coal, oil, and natural gas.

Sedimentary Rocks

Rocks formed by the accumulation and consolidation of sediment, which can include minerals and organic matter, typically found in layered deposits.

Fractured Granitic

Describes granitic rock that has been broken or cracked, often by natural processes such as tectonic movement or weathering.

Metamorphosed Rocks

Rocks that have undergone a physical or chemical change due to extreme heat and pressure, altering their original mineralogy and texture.