Figure 10-3

Multiple Choice

Figure 10-3. Bortello Corporation produces high-quality leather boots.The company has a standard cost system and has set the following standards for materials and labor:
During the year Bortello produced 125 boots.Actual leather purchased was 1,700 strips,at $16 per strip.There were no beginning or ending inventories of leather.Actual direct labor was 1,500 hours at $15 per hour.
Refer to Figure 10-3.Compute the costs of leather and direct labor that should have been incurred for the production of 125 boots.

A) $36,000 and $36,000
B) $46,500 and $37,500
C) $37,200 and $20,000
D) $30,000 and $15,000