The company expects to perform 25 setups in May.
-Refer to Figure 11-5. If the company expects 25 setups in the month of May, what would be the total budgeted costs of the setup activity?
A) $240,000
B) $375,000
C) $135,000
D) $397,500
E) None of these.

Question

The company expects to perform 25 setups in May.
-Refer to Figure 11-5. If the company expects 25 setups in the month of May, what would be the total budgeted costs of the setup activity?
A) $240,000 
B) $375,000 
C) $135,000 
D) $397,500 
E) None of these.

Quizplus · Accepted Answer

Looking at Figure 11-5, we can see that the budgeted cost per setup is $15,000 ($6,000 in setup labor costs + $9,000 in setup overhead costs). Multiplying this by the expected number of setups in May (25), we get a total budgeted cost of $375,000. Therefore, the correct answer is choice B.

The Company Expects to Perform 25 Setups in May