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Regis University Operations And Supply Chain Management Assignment Help - Cost Drivers


Question - Tennco, Inc has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows: Maintenance: $300,000 Inspection: $200,000 The following data have been assembled for use in developing a bid for a proposed job: Direct Materials: $3,000 Direct Labor: $8,000 Machine hours: 400 Number of inspections: 4 The practical capacity of machine hours for all jobs during the year is 25,000, and for inspections is 800. These are the cost drivers for maintenance and inspection costs, respectively. Using the appropriate cost drivers, the total cost of the potential job is: A. $11,000 B. $7,200 C. $16,800 D. $15,000

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