Widman, Inc

question 15

Multiple Choice

Widman, Inc. makes and sells only one product and uses standard costing. The standard cost sheet for one unit of product includes the following:

• Direct materials: 5 grams at $0.35 per gram
• Direct labor: 1 hour at $8 per hour

Last period the company had the following results:

• 5,000 grams of direct materials purchased at $0.40 per gram
• 4,000 grams of direct materials used in production
• 900 units of product were made
• 850 hours of direct labor were used at $8.50 per hour

-Compound B73G is used to make Vasconcellos Corporation's major product. The standard cost of B73G is $27.60 per ounce and the standard quantity is 8.6 ounces per unit of output. In the most recent month, 3,200 ounces of the raw material were purchased at a cost of $26.70 per ounce. When recording the purchase of materials, Raw Materials would be:

• A)debited for $88,320.
• B)debited for $85,440.
• C)credited for $85,440.
• D)credited for $88,320.

---

Definitions:

Compensating Differences

Wage differentials that are paid to workers to offset the undesirable aspects of a job or to compensate for risks associated with the job.

Divergence

The act or process of developing in different directions or deviating from a standard.

Compensating Differences

Wage differentials that compensate workers for undesirable job attributes, like risk of injury or undesirable hours.

Nonmonetary Characteristics

Features or aspects of a job or decision that are not related to salary or financial gain, such as workplace environment or job satisfaction.