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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Definitions:

1555 Peace of Augsburg

An important treaty in the Holy Roman Empire that allowed princes to choose Lutheranism or Catholicism as the religion of their territories.

Lutheranism

A major branch of Protestant Christianity which identifies with the theology of Martin Luther, a German monk and theologian who sought to reform the practices of the Roman Catholic Church in the 16th century.

Henry VIII

King of England from 1509 until his death in 1547, known for his six marriages and his role in the separation of the Church of England from the Roman Catholic Church, leading to significant religious and political changes.

Annul

To declare invalid an existing law, decree, decision, or marriage, making it as though it never existed.