Silver Faces, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed: $$\begin{array} { l l }
\text { Activity } & \text { Cost Formula } \
\text { Maintenance } & \$ 15,000 + \$ 4 \text { per machine hour } \
\text { Machining } & \$ 35,000 + \$ 1 \text { per machine hour } \
\text { Inspection } & \$ 60,000 + \$ 750 \text { per batch } \
\text { Setups } & \$ 1,000 \text { per batch } \
\text { Purchasing } & \$ 50,000 + \$ 10 \text { per purchase order }
\end{array}$$ What is the budgeted maintenance cost if there was production of 50,000 reflectors that will require 8,000 machine hours, 25 batches, and 15,000 purchase orders?
A)$15,000
B)$32,000
C)$47,000
D)$79,000

Question

Silver Faces, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed: $$\begin{array} { l l } 
\text { Activity } & \text { Cost Formula } \
\text { Maintenance } & \$ 15,000 + \$ 4 \text { per machine hour } \
\text { Machining } & \$ 35,000 + \$ 1 \text { per machine hour } \
\text { Inspection } & \$ 60,000 + \$ 750 \text { per batch } \
\text { Setups } & \$ 1,000 \text { per batch } \
\text { Purchasing } & \$ 50,000 + \$ 10 \text { per purchase order }
\end{array}$$ What is the budgeted maintenance cost if there was production of 50,000 reflectors that will require 8,000 machine hours, 25 batches, and 15,000 purchase orders?
A)$15,000
B)$32,000
C)$47,000
D)$79,000

Quizplus · Accepted Answer

The budgeted maintenance cost is calculated as $15,000 + ($4 * 8,000 machine hours) = $47,000.

Silver Faces, Inc What Is the Budgeted Maintenance Cost If There Was Production