11) Ruby Faces, Inc., has done a cost analysis for the production of reflectors
ID: 2340894 • Letter: 1
Question
11)
Ruby Faces, Inc., has done a cost analysis for the production of reflectors in its factory. The following activities and cost drivers have been developed:
Activity Cost Formula
Maintenance $10,000 + $3 per machine hour
Machining $40,000 + $2 per machine hour
Inspection $70,000 + $550 per batch
Setups $2,000 per batch
Purchasing $30,000 + $20 per purchase order
What is the machining cost for production of 60,000 reflectors that will require 6,000 machine hours, 20 batches, and 15,000 purchase orders?
(0.5pts)
$40,000
$52,000
$38,000
$60,500
Explanation / Answer
Answer
= 40000 + ( 2 x 6000)
= 40000 + 12000
= $ 52,000
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