Rydingsward, Inc

question 56

Essay

Rydingsward, Inc., has done a cost analysis for its production of reflectors.
The following activities and cost drivers have been developed: $\begin{array}{ll}\text { Activity } & \text { Cost Formula } \\\text { Maintenance } & £ 5,000+£ 8 \text { per machine hour } \\\text { Machining } & £ 25,000+£ 4 \text { per machine hour } \\\text { Inspection } & £ 90,000+£ 1,000 \text { per batch } \\\text { Setups } & £ 5,000 \text { per batch } \\\text { Purchasing } & £ 100,000+£ 100 \text { per purchase order }\end{array}$