Ingredient A12H Is a Material Used to Make Calvin Corporation's

question 132

Multiple Choice

Ingredient A12H is a material used to make Calvin Corporation's major product. The standard cost of Ingredient A12H is $23.00 per ounce and the standard quantity is 3.8 ounces per unit of output. Data concerning the compound for October appear below:
$$\begin{array} { l c c } \text { Cost of material purchased in October } & \$ 23.10 & \text { per ounce } \\\text { Material purchased in October } & 2,300 & \text { ournces } \\\text { Material used in production in October } & 2,120 & \text { ounces } \\\text { Actual output in October } & 600 & \text { units }\end{array}$$
The material was purchased on account and Calvin Corporation uses a standard costing system.
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The Material Price Variance for October would be recorded as a:

• A) debit of $230.
• B) credit of $212.
• C) debit of $212.
• D) credit of $230.

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Definitions:

Inputs

Resources used in the process of production, including labor, capital, materials, and energy.

Marginal Product

The additional output generated by using one more unit of a particular input, holding other inputs constant.

Inventory

The goods and materials a business holds for the ultimate goal of resale, production, or utilization.

Labor Hours

The total amount of time workers spend working in a given period, typically measured in hours per day, week, or year.