Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows:

Materials:(4.0 kilograms × $10.00 per kilogram)$40.00 Labor:(4.0 hours × $18.00 per hour)$72.00

All materials are issued at the beginning of processing. The operating data shown below were taken from the records for July:

In-process beginning inventory none In-process ending inventory—90% complete as to labor 1,000unitsUnits completed during the month 7,200unitsBudgeted output 8,000unitsPurchases of materials, in kilograms (AQ) 30,000 Total actual labor costs incurred$525,000 Direct labor hours worked (AQ) 28,000hoursMaterials purchase-price variance$3,000unfavorableIncrease in materials inventory in July 1,500kilogramsBeginning inventory of materials 0kg.

The actual total cost of direct materials used in production during July, to the nearest dollar, was:

$287,850

1. Materials purchase-price variance = (AP ? SP) × AQ.

2. $3,000U = (AP ? $10.00)/kg. × 30,000 kg. (Note: Because the purchase-price variance is unfavorable (given), AP > SP.)

3. $303,000 = 30,000 × AP (see note above, in (2))

4. Therefore, AP = $303,000/30,000 kg. = $10.10/kg.

5. Actual cost of materials issued to production = # kg. of material issued to production × actual cost per kg. = (30,000 units purchased (given) ? 1,500 kg. increase in ending inventory of materials (given)) × $10.10/kg. (answer to (4) above) = 28,500 kg. × $10.10/kg. = $287,850 (to nearest whole dollar)