Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labour hour, respectively. Data relevant for the current period include: The purchase of direct materials would be recorded in direct materials inventory at:
A) $540,000
B) $585,000
C) $600,000
D) $650,000

Question

Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labour hour, respectively. Data relevant for the current period include:  The purchase of direct materials would be recorded in direct materials inventory at:
A) $540,000 
B) $585,000 
C) $600,000 
D) $650,000

Quizplus · Accepted Answer

The Answer of Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labour hour, respectively. Data relevant for the current period include:  The purchase of direct materials would be recorded in direct materials inventory at:
A) $540,000 
B) $585,000 
C) $600,000 
D) $650,000