Use the Information Below to Answer the Following Questions:
the

question 45

Multiple Choice

Use the information below to answer the following questions:
The following information is taken from the accounts of Ray Ltd.
$\begin{array}{llcc}&\$\\ \text { Motor vehicles, 1 January 2012 } &620000 \\ \text {Motor vehicles, 31 December 2012 } &740000\\ \text {Accumulated depreciation } &\\ \text { - Motor vehicles, 1 January 2012 } &230000\\ \text {Accumulated depreciation } &\\ \text { - Motor vehicles, 31 December } &290000\\ \text {Depreciation expense } &\\ \text {- Motor vehicles, year ended 31 December 2012 } &1500\\ \text { Gain on sale of motor vehicle, } &\\ \text { year ended 31 December} &10000\\ \text { Acquisition of motor vehicles financed by loan} &\\ \text {to be paid in 5 years' time } &170000\\ \text { Cost price motor vehicles sold during the year } &130000\\\end{array}$


-What was the value of motor vehicles purchased for cash?

• A) $140 000
• B) $190 000
• C) $250 000
• D) $80 000.

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity of materials supposed to be used, multiplied by the standard cost per unit.

Standard Quantity

The predetermined amount of materials or inputs that should be used in the production of goods or services under normal operating conditions.

Standard Price

A predetermined cost assigned to goods and services, used for budgeting, cost control, and performance evaluation purposes.

Materials Price Variance

The difference between the actual cost of materials and the standard cost multiplied by the actual quantity used.