Question

Lacrue Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours Standard Quantity or Hours per Unit of Output Inputs Direct materials Direct labor Variable manufacturing overhead Standard Price or Rate $ 5.5e per ounce $22.00 per hour $ 3.80 per hour 6.3 ounces e.40 hours 0.40 hours The actual output for the period was 3,700 units. The standard amount of materials allowed for the actual output is closest to: Multiple Choice

23310 ounces

23300 ounces

22687 ounces

23940 ounces

Answer 1

Solution

Lacrue Inc

Determination of the standard amount of materials allowed for the actual output:

Standard amount of materials allowed for actual output = standard quantity x actual output

Standard quantity = 6.3 ounces per unit

Actual output = 3,700

Standard amount of materials allowed = 6.3 x 3,700 = 23,310 ounces

Hence, standard amount of materials allowed for the actual output = 23,310 ounces.