Problem 23-4A (Part Level Submission) Kansas Company uses a standard cost accoun

Question

Problem 23-4A (Part Level Submission)

Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,600 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 50,200 direct labor hours. During the year, 131,700 pounds of raw materials were purchased at $0.91 per pound. All materials purchased were used during the year.

(a)

Problem 23-4A (Part Level Submission)

Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,600 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 50,200 direct labor hours. During the year, 131,700 pounds of raw materials were purchased at $0.91 per pound. All materials purchased were used during the year.

Explanation / Answer

As per the question, Material Price Variance = (Standard Price-Actual Price)*Actual Material quantity used $       5,268 = (Standard Price-0.91)*131700 $         0.04 = Standard Price-0.91 $         0.95 = Standard Price Thus, Standard materials price per pound $ 0.95

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