Reference: 21_01
Five Rings, Inc, has collected the following data on one of its products:
$\begin{array}{ll}
\text { Direct materials standard (4 lbs. @ \$1/lb.) } & \$ 4 \text { per finished unit } \
\text { Total direct materials cost variance-unfavorable } & \$ 13,750 \
\text { Actual direct materials used } & 150,000 \mathrm{lbs} . \
\text { Actual finished units produced } & 30,000 \text { units }
\end{array}$
-The actual cost of the direct materials used is:
A) $133,750
B) $150,000
C) $106,250
D) $158,750
E) $120,000

Question

Reference: 21_01
Five Rings, Inc, has collected the following data on one of its products:
 $\begin{array}{ll}
\text { Direct materials standard (4 lbs. @ \$1/lb.) } & \$ 4 \text { per finished unit } \
\text { Total direct materials cost variance-unfavorable } & \$ 13,750 \
\text { Actual direct materials used } & 150,000 \mathrm{lbs} . \
\text { Actual finished units produced } & 30,000 \text { units }
\end{array}$ 
-The actual cost of the direct materials used is:
A) $133,750
B) $150,000
C) $106,250
D) $158,750
E) $120,000

Quizplus · Accepted Answer

The actual cost of the direct materials used is the sum of the standard cost and the unfavorable variance. The standard cost is $4 per finished unit, and the actual finished units produced is 30,000 units. Therefore, the standard cost of the direct materials used is $4 * 30,000 = $120,000. The unfavorable variance is $13,750. Therefore, the actual cost of the direct materials used is $120,000 + $13,750 = $133,750.

Reference: 21_01 Five Rings, Inc, Has Collected the Following Data

Reference: 21_01
Five Rings, Inc, Has Collected the Following Data