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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16 May, 07:10

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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Violet Dominguez · Answer 1

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