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Question - Brahtz Company uses an activity-based costing system. It has the following manufacturing activity areas, related cost drivers and cost allocation rates:
Activity
Cost Driver
Cost Allocation Rate
Machine setup
Number of setups
$25.00
Materials handling
Number of parts
0.25
Machining
Machine hours
13.00
Assembly
Direct labor hours
22.00
Inspection
Number of finished units
7.00
During the month, 100 units were produced, with no defects, requiring three setups. Each unit consisted of 17 parts, 3 direct labor hours and 2.5 machine hours. Direct materials cost $50 per finished unit.
What is the total manufacturing cost for inspections?
$-0-
$700
$90
$7
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