Benny's Bed Co

question 73

Multiple Choice

Benny's Bed Co. uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following data is available from the company records for the month of September 2018.
- The average cost-to-retail percentage (rounded) is:

• A) 74.5%.
• B) 55.6%.
• C) 57.4%.
• D) 58.7%.

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Definitions:

Materials Price Variance

The difference between the actual cost of raw materials and the expected cost at standard prices.

Standard Quantity

The expected or predetermined amount of materials or input needed to produce a single unit of product, used for manufacturing budgeting and variance analysis.

Standard Price

A predetermined cost that companies use for budgeting and assessing the performance of actual costs.

Actual Materials Purchased

The total quantity and cost of raw materials bought during a period for the purpose of production.