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