Compound G92N is used to make Passero Corporation's major product. The standard cost of G92N is $28.60 per ounce and the standard quantity is 2.9 ounces per unit of output. In the most recent month, 2,000 ounces of the raw material were purchased at a cost of $29.50 per ounce. When recording the purchase of materials, Raw Materials would be:
A) credited for $59,000.
B) debited for $57,200.
C) credited for $57,200.
D) debited for $59,000.

Question

Quizplus · Accepted Answer

The standard cost of G92N is $28.60 per ounce and 2,000 ounces were purchased, so the total standard cost of the materials purchased is $28.60 * 2,000 = $57,200. When recording the purchase of materials, Raw Materials would be debited for this amount.

Compound G92N Is Used to Make Passero Corporation's Major Product