Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms × $12.00/kilogram) = $60.00/unit; direct labor (3.5 hours/unit × $20.00/hour) = $70.00/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December:The actual total cost of direct materials used in production during December (to the nearest dollar) was:
A) $458,068.
B) $459,862.
C) $461,132.
D) $462,938.
E) $478,400.

Question

Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms × $12.00/kilogram) = $60.00/unit; direct labor (3.5 hours/unit × $20.00/hour) = $70.00/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December:The actual total cost of direct materials used in production during December (to the nearest dollar) was:
A) $458,068. 
B) $459,862. 
C) $461,132. 
D) $462,938. 
E) $478,400.

Quizplus · Accepted Answer

To calculate the actual total cost of direct materials used in production during December, we need to use the actual quantity of materials used and the actual cost per unit of material. 
Given: 
Standard cost per unit of material = $12.00
Standard quantity per unit of material = 5 kilograms
Actual quantity of materials used = 38,322 kilograms
Actual cost per unit of material = $12.00
Actual Total Cost of Direct Materials = Actual Quantity of Materials Used x Actual Cost per unit of Material
= 38,322 x $12.00
= $459,864
Rounded to the nearest dollar, the answer is B) $459,862.

Shade Company Adopted a Standard Cost System Several Years Ago