A Computer Chip Is Purchased to Be Used in the Manufacture

question 61

Multiple Choice

A computer chip is purchased to be used in the manufacture of a radio.The standard price of the computer chip is $50.00.During the month of January,2,240 computer chips were purchased and used.The materials price variance was $5,600 unfavorable.The standard number of computer chips allowed for the actual number of radios manufactured during the period was 31,000 chips.What was the actual purchase price of each computer chip?

• A)$ 47.50 per computer chip
• B)$ 49.82 per computer chip
• C)$ 50.18 per computer chip
• D)$ 52.50 per computer chip

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Definitions:

Finished Goods

Inventory items that have completed the manufacturing process and are ready for sale to customers.

Direct Labor Cost

The expense related to the work of employees directly involved in the production of goods or services, such as wages for assembly line workers.

Direct Labor-Hours

Direct labor-hours are the total number of hours worked by employees directly involved in the manufacturing process, used as a basis for assigning labor costs to products.

Direct Materials

Raw materials that can be directly identified with the production of specific goods or services and are a major component of product costs.