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Got you, so when they say total standard cost of materials, they are talking about materials used and not materials purchased.
Thank you so much!
So my main concern is with the first question. Obviously the answer is given, which is 11,500 units. I figure that you get this answer by taking the total standard cost of materials purchased, $115,ooo, and dividing it by $5 to get the amount of materials in kg as 23,000kg and then dividing by 2kg per unit to get the actual number of break discs manufactured,11,500 units.
What I don’t understand is the part in the question which states 22,500kgs of materials were purchased.
The question tells you that materials purchased are recorded at standard cost, so 22,500kgs of material at standard cost would be 22,500 x $5 per kg = $112,500.
The next info given in the questions says ‘The total standard cost of the materials was $115,000’.What am I missing? Why are these dollar amounts different?
When I was trying to get the answer to question 1, I took the 22,500kgs purchased and divided by 2kg per unit to get 11,250 units.
This is where my main confusion lies.
Any help explaining this part would be really appreciated.