Grace Faces, Inc., has done a cost analysis for the production of reflectors in its factory. The following activities and cost drivers have been developed: $$\begin{array} { l l }
\text { Activity } & \text { Cost Formula } \
\text { Maintenance } & \$ 20,000 + \$ 3 \text { per machine hour } \
\text { Machining } & \$ 40,000 + \$ 2 \text { per machine hour } \
\text { Inspection } & \$ 32,000 + \$ 600 \text { per batch } \
\text { Setups } & \$ 1,200 \text { per batch } \
\text { Purchasing } & \$ 56,000 + \$ 8 \text { per purchase order }
\end{array}$$ What is the budget for maintenance if 10,000 reflectors were made that required 2,200 machine hours, 10 batches, and 3,000 purchase orders?
A)$15,500
B)$10,250
C)$26,600
D)$11,200

Question

Grace Faces, Inc., has done a cost analysis for the production of reflectors in its factory. The following activities and cost drivers have been developed: $$\begin{array} { l l } 
\text { Activity } & \text { Cost Formula } \
\text { Maintenance } & \$ 20,000 + \$ 3 \text { per machine hour } \
\text { Machining } & \$ 40,000 + \$ 2 \text { per machine hour } \
\text { Inspection } & \$ 32,000 + \$ 600 \text { per batch } \
\text { Setups } & \$ 1,200 \text { per batch } \
\text { Purchasing } & \$ 56,000 + \$ 8 \text { per purchase order }
\end{array}$$ What is the budget for maintenance if 10,000 reflectors were made that required 2,200 machine hours, 10 batches, and 3,000 purchase orders?
A)$15,500
B)$10,250
C)$26,600
D)$11,200

Quizplus · Accepted Answer

The budget for maintenance is calculated using the formula given: $20,000 + $3 per machine hour. With 2,200 machine hours, the calculation is $20,000 + ($3 * 2,200) = $20,000 + $6,600 = $26,600.

Grace Faces, Inc What Is the Budget for Maintenance If 10,000 Reflectors Were