The Amount of Direct Materials Cost in the March 31

question 13

Multiple Choice

The amount of direct materials cost in the March 31 work in process inventory account was:

• A) $3,850.
• B) $5,150.
• C) $9,000.
• D) $9,350.

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Definitions:

Standard Hours Allowed

The time that should have been taken to complete the period’s output. It is computed by multiplying the actual number of units produced by the standard hours per unit.

Material Price Variances

The difference between the expected cost of materials and the actual cost incurred, useful in budgeting and cost management.

Labor Efficiency Variance

A measure used in cost accounting to gauge the difference between the actual hours taken to produce a good or service and the standard hours expected, multiplied by the standard labor rate.

Labor Rate Variance

The difference between the actual cost of labor and its expected cost, based on standard rates and hours.