Question

Aquatic Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. Aquatic uses standard costs to prepare its flexible budget. For the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows: Direct materials: 5 pounds per unit; $6 per pound Direct labor: 4 hours per unit; $16 per hour During the first quarter, Aquatic produced 3000 units of this product. Actual direct materials and direct labor costs were $65,000 and $326,000, respectively. For the purpose of preparing the flexible budget, calculate the total standard direct materials cost at a production volume of 3000 units. $18,000 $65,000 $15,000 $90,000

Answer 1

Answer:

$90,000

Explanation:

Standart direct materials cost for a production of 3,000 untis

standard quantity per unit x volume = standard quantity

5 pound per unit x 3,000 = 15,000 pounds

standard quantity x standard price per pound = standard total cost for direct materials

15,000 pounds x $6 each = $90,000

First using the quantity per unit we determinatethe total raw materials needed using the standard metric

then we multiply by the standard cost per poundto calculate the total standard cost.