Silver Faces, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed: What is the machining cost for production of 50,000 reflectors that will require 8,000 machine hours, 25 batches, and 15,000 purchase orders?

Question

Silver Faces, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed:  What is the machining cost for production of 50,000 reflectors that will require 8,000 machine hours, 25 batches, and 15,000 purchase orders?

Quizplus · Accepted Answer

We need to calculate the total machining cost using the provided cost drivers:

Machining cost = Machine hours cost + Batch cost + Purchase order cost
Machining cost = (8,000 machine hours × $3 per hour) + (25 batches × $800 per batch) + (15,000 purchase orders × $1 per order)
Machining cost = ($24,000) + ($20,000) + ($15,000)
Machining cost = $59,000

Therefore, the machining cost for the production of 50,000 reflectors is $59,000. The only answer option that matches this value is B.