Boxes Company has collected the following data for one of its products:
$$\begin{array} { | l | l | }
\hline \text { Direct materials standard (3 pounds @ \$1/lb.) } & \$ 3 \text { per finished good } \
\hline \text { Direct materials flexible budget variance-unfavorable } & \$ 14,000 \
\hline \text { Actual direct materials used } & 100,000 \text { pounds } \
\hline \text { Actual finished goods produced } & 25,000 \text { units } \
\hline
\end{array}$$ What is the total actual cost of the direct materials used?
A) $100,000
B) $89,000
C) $75,000
D) $83,250

Question

Boxes Company has collected the following data for one of its products:
$$\begin{array} { | l | l | } 
\hline \text { Direct materials standard (3 pounds @ \$1/lb.) } & \$ 3 \text { per finished good } \
\hline \text { Direct materials flexible budget variance-unfavorable } & \$ 14,000 \
\hline \text { Actual direct materials used } & 100,000 \text { pounds } \
\hline \text { Actual finished goods produced } & 25,000 \text { units } \
\hline
\end{array}$$ What is the total actual cost of the direct materials used?
A) $100,000
B) $89,000
C) $75,000
D) $83,250

Quizplus · Accepted Answer

The total actual cost of the direct materials used can be calculated by adding the flexible budget variance to the standard cost of materials for the actual production. The standard cost for the actual production is 25,000 units * $3/unit = $75,000. Adding the unfavorable variance of $14,000 gives $75,000 + $14,000 = $89,000.

Boxes Company Has Collected the Following Data for One of Its