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

---

Definitions:

Operating Activities

Activities that constitute the primary or central operations of a business, generating revenue and incurring expenses as part of its regular business functions.

Investing Activities

Financial transactions related to the acquisition or sale of long-term assets and investments not considered cash equivalents.

Financing Activities

Transactions that involve raising capital and repaying investors, including issuing stock and paying dividends.

Land Purchase

This refers to the acquisition of land as an asset, representing the cost paid to obtain ownership of a land parcel.