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10 September, 07:09

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

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  1. 10 September, 07:32
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    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
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