Cintron Company produces high-quality leather belts. The Boise plant uses a stan

Question

Cintron Company produces high-quality leather belts. The Boise plant uses a standard costing system with the following standards for materials (leather strips) and direct labor.

There are no beginning or ending inventories for direct materials.

For direct materials, what is the total cost that should be incurred?

Standard Prices     Price per Leather Strip (Direct Material) $ 3     Price per Labor Hour $ 12 July Data Number of Belts Produced 38,203 Number of Leather Strips Purchased 109,545 Number of Labor Hours Used 20,842 Actual Cost per Leather Strip $ 5 Actual Cost per Labor Hour $ 9 Standard Quantity of Materials Allowed (given production) 92,787     Standard Quantity of Labor Allowed (given production) 17,807

Explanation / Answer

For direct materials, what is the total cost that should be incurred?

Total cost incurred = Actual quantity*acutal cost per leather strip

                               = 109545*5

Total cost incurred = 547725

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