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Rydingsward, 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 maintenance cost if there was production of 50 000 reflectors that will require 8000 machine hours, 25 batches and 15 000 purchase orders?

 

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