The Heavenly Gifts Company,a maker of Holiday novelties,needs your help immediately.The company's accountant resigned without leaving adequate records or explanations for what she did.In reviewing the records,you find the following information for May: You find a copy of the budget which shows that materials were budgeted at $0.60/unit.You know that the materials price variance is recorded at the time of purchase and you find some handwritten notes among the accountant's work papers,which indicate the following: What was the total standard cost of direct materials purchased during May?
A)$9,150.
B)$11,800.
C)$12,000.
D)$12,200.

Question

The Heavenly Gifts Company,a maker of Holiday novelties,needs your help immediately.The company's accountant resigned without leaving adequate records or explanations for what she did.In reviewing the records,you find the following information for May:  You find a copy of the budget which shows that materials were budgeted at $0.60/unit.You know that the materials price variance is recorded at the time of purchase and you find some handwritten notes among the accountant's work papers,which indicate the following:  What was the total standard cost of direct materials purchased during May?
A)$9,150. 
B)$11,800. 
C)$12,000. 
D)$12,200.

Quizplus · Accepted Answer

The total actual cost of direct materials purchased during May is $11,400 ($9,000 + $2,400). To find out the total standard cost of direct materials purchased during May, we need to multiply the total quantity of materials purchased (20,000 units) by the standard price per unit ($0.60/unit). 
Total Standard Cost of Direct Materials Purchased = 20,000 units x $0.60/unit = $12,000. 
Therefore, the correct answer is C.

The Heavenly Gifts Company,a Maker of Holiday Novelties,needs Your Help