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 x $12.00 per kilogram)= $60.00/unit.Direct labor (3.5 hours x $20.00 per hour)= $70.00/unit.All materials were 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 is:
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 x $12.00 per kilogram)= $60.00/unit.Direct labor (3.5 hours x $20.00 per hour)= $70.00/unit.All materials were 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 is:
A)$458,068. 
B)$459,862. 
C)$461,132. 
D)$462,938. 
E)$478,400.

Quizplus · Accepted Answer

Actual total cost of direct materials used in production = (Beginning Inventory + Purchases - Ending Inventory) x Standard Cost per unit
= (12,000 + 450,000 - 9,200) x $12.00
= $5,398,400
= $459,862 (rounded to nearest dollar)

Shade Company Adopted a Standard Cost System Several Years Ago