Grayson Industries Has Collected the Following Data for One of Its

question 21

Multiple Choice

Grayson Industries has collected the following data for one of its products: $$\begin{array} { | l | l | } \hline \text { Direct materials standard (4 pounds per unit @ \$0.50/b.) } & \$ 2 \text { per finished good } \\\hline \text { Direct materials flexible budget variance-unfavorable } & \$ 10,000 \\\hline \text { Actual direct materials used } & 40,000 \text { pounds } \\\hline \text { Actual firished goods produced } & 24,000 \text { urits } \\\hline\end{array}$$
-What is the total actual cost of the direct materials used?

• A)$20,000
• B)$48,000
• C)$58,000
• D)$38,000

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Definitions:

Consideration

The value (usually money, service, or goods) exchanged between parties in a contract that compels them to fulfill their mutual obligations.

Preexisting Duty

An obligation that a party is already bound to by law or by some other agreement. The party may not use this as consideration in a new contract.

Promissory Estoppel

A judicial principle that stops one from retracting a pledge given to another if the latter has justifiably depended on the promise to their disadvantage.

Disputed Amounts

Refers to the sums of money under contention between parties in transactions or contracts, often leading to negotiation or legal actions.