Cryolite Uses a Standard Costing System to Gauge Results for Their

question 116

Multiple Choice

Cryolite uses a standard costing system to gauge results for their single product. 70,000 kilograms of direct materials were purchased for $385,000. Two kilograms of direct materials are needed to produce one unit of product. In March, the company produced 12,000 units. The standard cost allowed for direct material was $120,000, and there was an unfavourable direct materials efficiency variance of $2,500.
Cryolite's standard cost for one kilogram of direct material is:

• A) $5.00
• B) $6.00
• C) $10.00
• D) $12.00

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