The Geurtz Company uses standard costing. The company makes and sells a single p

Question

The Geurtz Company uses standard costing. The company makes and sells a single product called a Roff. The following data are for the month of August: Actual cost of direct material purchased and used: $85,400 Material price variance: $12,200 unfavorable Total materials variance: $26,000 unfavorable Standard cost per pound of material: $3 Standard cost per direct labor-hour: $5 Actual direct labor-hours: 9,100 hours .Labor efficiency variance: $4,000 favorable Standard number of direct labor-hours per unit of Roff: 3 hours Total labor variance: $550 unfavorable The actual material cost per pound was: (Round your final answer to 2 decimal places.) O $6.60 O $4.50 O $3.00 O $3.50

Explanation / Answer

The actual material cost per pound was 3.50 Standard Actual Particulars Quantity Rate amount Quantity Rate amount Materials            19,800.00                      3.00            59,400.00            24,400.00                      3.50            85,400.00 Direct material cost variance =Std Cost - Actual cost -26,000 =Std Cost - 85400 Standard cost = 59,400 Standard Quantity = 59,400/3            19,800.00 DMCV = DMPV + DMQV -26,000 = -12,200 + DMQV DMQV = -26000 + 12200 = 13,800 U DMQV= (SQ-AQ)SP -13,800= (19,800 - AQ)3 -4,600 = 19,800 - AQ AQ =24,400 Actual price = 85,400/24,400                      3.50

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