Cryolite uses a standard costing system to gauge results for their single product. 70,000 kilograms of direct materials were purchased for $385,000. Two kilograms of direct materials are needed to produce one unit of product. In March, the company produced 12,000 units. The standard cost allowed for direct material was $120,000, and there was an unfavourable direct materials efficiency variance of $2,500. (CMA)Cryolite's standard cost for one kilogram of direct material is:
A)$5.00
B)$6.00
C)$10.00
D)$12.00

Question

Quizplus · Accepted Answer

The standard cost allowed for direct material is $120,000 for 12,000 units, which means $120,000 / (12,000 units * 2 kg/unit) = $5.00 per kilogram.

Cryolite Uses a Standard Costing System to Gauge Results for Their