Item1

10points

Item 1

The Fantasy Gifts Company, a maker of Holiday novelties, needs your help immediately. The company's accountant resigned without leaving adequate records or explanations for what she did. In reviewing the records, you find the following information for May:

Materials Purchased	34,000	units
Materials Used	22,000	units

You find a copy of the budget which shows that materials were budgeted at $0.60/unit. You know that the material price variance is recorded at the time of purchase and you find some handwritten notes among the accountant's work papers, which indicate the following:

Material price variance	$	340	F
Material efficiency variance	$	1,300	F

What was the total actual cost of the direct materials purchased during May?

Multiple Choice

• $20,400.

• $20,060.

• $13,200.

• $20,740.

Please show workings