Use the Following Information for the Next 5 Questions

question 82

Multiple Choice

Use the following information for the next 5 questions.
Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labor hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labor hour, respectively. Data relevant for the current period include:
-The cost of direct materials added to work in process would be

• A) $540,000
• B) $585,000
• C) $600,000
• D) $650,000

---

Definitions:

Socially Efficient

A situation in which an outcome benefits society as a whole and resources are allocated in the most beneficial manner from a societal perspective.

Marginal Cost

The increase in total cost that arises from producing one extra unit of a good or service.

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and products that are close substitutes, leading to price competition and efficiency.

Utility Functions

Represent mathematical models that quantify an individual's preference for certain bundles of goods or services under conditions of scarcity.