Solo Company Has Developed Cost Formulas for the Drivers of the Following

question 135

Multiple Choice

Solo Company has developed cost formulas for the drivers of the following production activities: $$\begin{array} { l l r r } \text { Driver } & \text { Activity } & \text { Fixed } & \text { Variable } \\\text { Labour hours } & \text { Materials } & - 0 - & 40 \\\text { Labour hours } & \text { Labour } & - 0 - & 20 \\\text { Machine hours } & \text { Maintenance } & 20,000 & 16 \\\text { Machine hours } & \text { Machining } & 100,000 & 4 \\\text { Number of setups } & \text { Inspections } & 60,000 & 400 \\\text { Number of setups } & \text { Setups } & - 0 - & 600 \\\text { Number of purchase orders } & \text { Purchasing } & 150,000 & 6\end{array}$$ What is the budgeted inspection cost for 20 setups?

• A) $60,000
• B) $68,000
• C) $160,000
• D) $330,000

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