25.

Assume that a company makes only one product, maintains no beginning or ending inventories, and uses a standard costing system. The standard cost card for that product is shown below:

	Standard Quantity or Hours		Standard Price or Rate		Standard Cost
Direct materials	3	pounds	$ 13.00	per pound	$ 39.00
Direct labor	2	hours	$ 16.00	per hour	$ 32.00
Fixed manufacturing overhead	2	hours	$ 8.00	per hour	$ 16.00

The company purchased 22,300 pounds of direct materials from its supplier at a cost of $12.50 per pound. The company used 21,000 pounds of direct material to start and complete 7,800 units of finished goods during the period. Its direct laborers worked 16,000 hours and were paid a total of $248,000. Based on this information, the total increase recorded in the Raw Materials account would be:

Garrison 17e Rechecks 2020-09-29

Multiple Choice

• $278,750.

• $304,200.

• $289,900.

• $296,400.

26.

Assume the following information appears in the standard cost card for a company that makes only one product:

	Standard Quantity or Hours		Standard Price or Rate		Standard Cost
Direct materials	5	pounds	$ 11.00	per pound	$ 55.00
Direct labor	2	hours	$ 17.00	per hour	$ 34.00
Variable manufacturing overhead	2	hours	$ 3.00	per hour	$ 6.00

During the most recent period, the following additional information was available:

• 20,000 pounds of material was purchased at a cost of $10.50 per pound.
• All of the material that was purchased was used to produce 3,900 units.
• 8,000 direct labor-hours were recorded at a total cost of $132,000.

What is the direct materials spending variance?

Garrison 17e Rechecks 2020-09-29

Multiple Choice

• $5,500 U

• $5,500 F

• $4,500 U

• $4,500 F