Rollo Company has developed cost formulas for the drivers of the following production activities: The budgeted inspection cost for 20 setups is
A)$175,860.
B)$40,000.
C)$34,000.
D)$30,000.

Question

Rollo Company has developed cost formulas for the drivers of the following production activities:  The budgeted inspection cost for 20 setups is
A)$175,860. 
B)$40,000. 
C)$34,000. 
D)$30,000.

Quizplus · Accepted Answer

Using the cost formula provided, we can calculate the inspection cost for 20 setups as follows:

Inspection Cost = 2,000 + (10 x 20) = 2,200

Total Inspection Cost = 2,200 x 20 = $44,000

Therefore, the budgeted inspection cost for 20 setups is $34,000 (after rounding to the nearest thousand).

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