Peridot Company Has Developed Ideal Standards for Four Activities: Labor

question 87

Multiple Choice

Peridot Company has developed ideal standards for four activities: labor, materials, inspection, and receiving.
Information is as follows:
$\begin{array}{llrrr}&&\text { Standard}&\text {Actual }&\text { Standard}\\\text { Activity } & \text { Activity Driver } & \text { Quantity } & \text { Quantity } & \text { Frice } \\\text { Inspection } & \text { Inspection hours } & & 20,000 & \$ 8 \\\text { Labor } & \text { Hours } & 20,000 & 25,000 & 6 \\\text { Materials } & \text { Pounds } & 90,000 & 120,000 & 5 \\\text { Receiving } & \text { Orders } & 200 & 250 & 210\end{array}$
Compute the value-added costs for materials.

• A)$450,000
• B)$150,000
• C)$400,000
• D)$200,000

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Definitions:

Partnership Interest

An ownership share in a partnership that represents a portion of the entity's assets and income.

Depreciate

To reduce the recorded value of an asset in financial accounts over its useful life to reflect wear and tear, obsolescence, or decline in value.

Holding Period

The length of time an investment is held before being sold, which can affect the capital gains tax owed upon sale.

FMV

Fair Market Value, the price at which property would change hands between a willing buyer and a willing seller, neither being under compulsion to buy or sell.