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

question 97

Multiple Choice

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

Albert Ellis

Albert Ellis was an American psychologist who developed Rational Emotive Behavior Therapy (REBT), a method focused on helping individuals identify and change irrational beliefs that lead to emotional and behavioral issues.

Stress response

The body's response to a challenge or demand, characterized by physiological, psychological, and behavioral changes aimed at adapting to the stressor.

Exhaustion stage

The third phase of the General Adaptation Syndrome, characterized by depleted physical and mental resources following prolonged stress.

Routine hassles

Minor everyday problems or annoyances that, although seemingly trivial, can accumulate and contribute significantly to stress and health problems.