Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labour hour, respectively. Data relevant for the current period include: The cost of direct materials added to work in process would be:
A) $540,000
B) $585,000
C) $600,000
D) $650,000

Question

Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labour hour, respectively. Data relevant for the current period include:  The cost of direct materials added to work in process would be:
A) $540,000 
B) $585,000 
C) $600,000 
D) $650,000

Quizplus · Accepted Answer

There is no information given to calculate the cost of direct materials added to work in process. The only information given is about the overhead rates. Therefore, we cannot use overhead rates to calculate the cost of direct materials.

Hence, the cost of direct materials added to work in process cannot be determined with the given information, and the answer is not provided.