Rilloto Ltd Uses a Standard Costing System The Purchase of Direct Materials Would Be Recorded in Direct

question 74

Multiple Choice

Rilloto Ltd uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $3 and $10 per direct labour hour, respectively. Data relevant for the current period include: $$\begin{array} { | l | l | } \hline \text { Direct Materials Purchased } & 75,000 \mathrm { k } @ , \$ 11 \text { per kg } \\\hline \text { Direct Materials Used } & 75,000 \mathrm { k } \\\hline \begin{array} { l } \text { Standard quartity of direct materials for actual } \\\text { production }\end{array} & 80,000 \mathrm {~kg} \\\hline \text { Direct Materials stardard price } & \$ 13 \text { per kg } \\\hline \text { Direct labour costs incured } & 76,000 @ \$ 14 \text { per hour } \\\hline \begin{array} { l } \text { Standard Direct Lubour hours for actual } \\\text { production }\end{array} & 78,000 \text { hours } \\\hline \text { Stardard Direct Labour cost per hour } & \$ 15 \text { per hour } \\\hline \text { Variable overhead costs incured } & \$ 231,210 \\\hline \text { Fixed overhead costs ircured } & \$ 763,000 \\\hline\end{array}$$ The purchase of direct materials would be recorded in direct materials inventory at:

• A) $1,040,000
• B) $975,000
• C) $825,000
• D) $750,000

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