Rydingsward, Inc., has done a cost analysis for its production of reflectors.The following activities and cost drivers have been developed:
-What is the budget for maintenance if 20,000 reflectors were made that required 3,500 machine hours, 12 batches, and 5,000 purchase orders?

Question

Rydingsward, Inc., has done a cost analysis for its production of reflectors.The following activities and cost drivers have been developed:  
-What is the budget for maintenance if 20,000 reflectors were made that required 3,500 machine hours, 12 batches, and 5,000 purchase orders?

Quizplus · Accepted Answer

The budget for maintenance is calculated based on machine hours. If 3,500 machine hours are used, and the cost per machine hour is $8.29, then the budget for maintenance is 3,500 hours * $8.29/hour = $29,015, which rounds to $29,000.