Question: Silver Faces, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed: Activity Cost Formula

Silver Faces, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed:
Activity Cost Formula
Maintenance $15,000+ $4 per machine hour
Machining $35,000+ $1 per machine hour
Inspection $60,000+ $750 per batch
Setups $1,000 per batch
Purchasing $50,000+ $10 per purchase order
What is the budgeted inspection cost if there was production of 50,000 reflectors that will require 8,000 machine hours, 25 batches, and 15,000 purchase orders?
a. $66,000
b. $60,000
c. $78,750
d. $18,750

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