Rydingsward, Inc -Refer to the Figure

question 140

Multiple Choice

Rydingsward, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed:
$$\begin{array} { l l } \text { Activit } & \text { Cost Formula } \\\hline \text { Maintenance } & \$ 15,000 + \$ 4 \text { per machine hour } \\\text { Machiring } & \$ 35,000 + \$ 1 \text { per machine hour } \\\text { Inspection } & \$ 60,000 + \$ 750 \text { per batch } \\\text { Setups } & \$ 1,000 \text { per batch } \\\text { Purchasing } & \$ 50,000 + \$ 10 \text { per purchase order }\end{array}$$
-Refer to the figure.What is the budget for maintenance if 20,000 reflectors were made that required 3,500 machine hours,12 batches,and 5,000 purchase orders?

• A)$3,500
• B)$14,000
• C)$15,000
• D)$29,000

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Definitions:

Market Power

The ability of a firm or group of firms to manipulate or control the price and supply of a product or service in the market.

Profit Maximizing

A strategy or process undertaken by a firm to achieve the highest possible profit from its operations.

Price

The amount of money required to purchase a product or service.

Price Elasticity Of Demand

Percentage change in quantity demanded of a good resulting from a 1-percent increase in its price.