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lyudmila [28]
3 years ago
10

Happinessistheroad Corp. has the following information available regarding its materials: Managers expected to pay $5 per kilogr

am. Each unit produced should take 2 kilograms; actual total usage was 2,100 kilograms. Finally, the company planned to produce 1,000 units, but only produced 950. The direct materials spending variance is $1,050 (unfavorable). How much did the company pay per kilogram of materials?
Business
1 answer:
LenaWriter [7]3 years ago
6 0

Answer:

$5.5= actual price

Explanation:

Giving the following information:

Managers expected to pay $5 per kilogram.

Each unit produced should take 2 kilograms; actual total usage was 2,100 kilograms.

The company produced 950 units.

The direct materials spending variance is $1,050 (unfavorable).

To calculate the actual price per kilogram, we need to use the direct material spending variance.

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

-1,050= (5 - actual price)*2,100

-0.5= 5 - actual price

5.5= actual price

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