A Company Using a Standard Costing System Uses an Actual

question 36

Multiple Choice

A company using a standard costing system uses an actual quantity of 1100 kg of material at an actual cost of $1.20 per kg. The standard quantity allowed was 1000 kg at a standard cost of $1.00 per kg. After the goods are completed and transferred from work in process inventory, what is the cost of direct material that would appear in finished goods inventory?

• A) $1000
• B) $1100
• C) $1200
• D) $1320

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Definitions:

Staples

Basic or essential food items and products that are consumed regularly and necessary for daily living.

Paper Clips

Small pieces of bent wire or plastic used for holding sheets of paper together.

Utility-Maximizing

The process by which individuals choose consumption bundles that will give them the greatest amount of satisfaction or utility.

Diminishing Marginal Utility

The decrease in satisfaction or usefulness as additional units of a product are consumed.