Question

Kansas Company uses a standard cost accounting system. In 2017, the company produced 28,000 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,000 direct labor hours. During the year, 117,000 pounds of raw materials were purchased at $0.92 per pound. All materials purchased were used during the year. Instructions (a) If the materials price variance was $3,510 favorable, what was the standard materials price per pound

Answer 1

Answer:

0.95= standard price

Explanation:

Giving the following information:

In 2017, the company produced 28,000 units. During the year, 117,000 pounds of raw materials were purchased at $0.92 per pound.

Direct material price variance= (standard price - actual price)* actual quantity

3510= (sp - 0.92)*117000

0.03=sp-0.92

0.95= standard price