Bandolero Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving. Information is as follows: The actual prices paid per unit of each activity driver were equal to the standard prices. The actual costs for
Receiving are
A) $49,500.
B) $67,500.
C) $85,500.
D) $18,000.

Question

Bandolero Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving. Information is as follows:  The actual prices paid per unit of each activity driver were equal to the standard prices. The actual costs for
Receiving are
A) $49,500. 
B) $67,500. 
C) $85,500. 
D) $18,000.

Quizplus · Accepted Answer

The actual costs for receiving are calculated by multiplying the actual units of receiving (42,000) by the standard price of receiving ($2.75). This equals $115,500. However, the company received a purchase discount of $30,000, so the actual cost for receiving is $85,500 ($115,500 - $30,000).

Bandolero Corporation Has Developed Ideal Standards for Four Activities: Labor