Solo Company Has Developed Cost Formulas for the Drivers of the Following

Multiple Choice

Solo Company has developed cost formulas for the drivers of the following production activities: $\begin{array}{llcc}\text { Driver } & \text { Activity } & \text { Fixed} & \text { Variable }\\\text { Labour hours } & \text { Materials } & -0- & 40 \\\text { Labour hours } & \text { Labour } & -0- & 20 \\\text { Machine hours } & \text { Maintenance } & 20,000 & 16 \\\text { Machine hours } & \text { Machining } & 100,000 & 4 \\\text { Number of setups } & \text { Inspections } & 60,000 & 400 \\\text { Number of setups } & \text { Setups } & -0- & 600 \\\text { Number of purchase orders } & \text { Purchasing } & 150,000 & 6\end{array}$ What is the budgeted inspection cost for 20 setups?

A) $60,000
B) $68,000
C) $160,000
D) $330,000