Reference: 11-01
Bryan Company Employs a Standard Cost System in Which

question 20

Multiple Choice

Reference: 11-01
Bryan Company employs a standard cost system in which direct materials inventory is carried at standard cost. Bryan has established the following standards for the prime costs of one unit of product: $$\begin{array} { | l | c | l | c | } \hline & \text { Standard Quantity } & \text { Standard Price } & \text { Standard Cost } \\\hline \text { Direct materials } & 6.0 \text { grams } & \$ 3.50 / \text { gram } & \$ 21.00 \\\hline \text { Direct labour } & 1.3 \text { hours } & \$ 11.00 / \text { hour } & 14.30 \\\hline & & & \$ 35.30 \\\hline\end{array}$$ During March, Bryan purchased 165,000 grams of direct material at a total cost of $585,750. The total factory wages for March were $400,000, 90 percent of which were for direct labour. Bryan manufactured 25,000 units of product during March using 151,000 grams of direct material and 32,000 direct labour hours.
-Cox Company's direct material costs for the month of January were as follows: 78 $$\begin{array} { | l | l | l | } \hline \text { Actual quantity purchased } & 18,000 & \text { kilograms } \\\hline \text { Actual unit purchase price } & \$ 3,60 & \text { per kilogram } \\\hline \begin{array} { l } \text { Materials price variance-unfavourable (based on } \\\text { purchases) }\end{array} & \$ 3,600 & \\\hline \text { Standard quantity allowed for actual production } & 16,000 & \\\hline \text { Actual quantity used } & 15,000 & \text { kilograms } \\\hline\end{array}$$ For January there was a favourable direct material quantity variance of?

• A)$3,400.
• B)$3,375.
• C)$3,800.
• D)$3,360.

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Definitions:

Restricted Fund Method

An accounting strategy used for tracking and reporting separately on resources that are restricted by donors for specific purposes.

Capitalize

To record a cost/expense on the balance sheet for the purposes of delaying full recognition of the expense over time through depreciation or amortization.

Expense Capital Assets

The process of recording the cost of a capital asset as an expense over its useful life, often through depreciation or amortization.

Not-for-profit Organization

A type of organization that does not distribute its excess profits to owners or shareholders but instead uses them to help achieve its goals.