If Total Warehousing Cost for the Year Amounts to $950,000

question 154

Multiple Choice

If total warehousing cost for the year amounts to $950,000, and 35 percent of the warehousing activity is associated with finished goods and 65 percent with direct materials, how much of the cost would be charged as a product cost?

• A)$285,000
• B)$332,500
• C)$617,500
• D)$950,000

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Definitions:

Actual Hours (AH)

The real number of hours worked or required to complete a specific task or project, as opposed to estimated or planned hours.

Standard Hours (SH)

Standard Hours (SH) refer to the estimated time considered necessary to perform a task or produce a good under normal conditions, used for planning and efficiency analysis.

Materials Price Variance

The difference between the actual cost of materials used in production and the standard cost of those materials.

Attainable Standard

A performance measure based on achievable levels of efficiency and effectiveness under current conditions.