Oklahoma Manufacturing Company uses a standard cost accounting system. In 2012,

Question

Oklahoma Manufacturing Company uses a standard cost accounting system. In 2012, the company produced 28,100 units. Each unit took several pounds of direct materials and 1½ standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,350 direct labor hours. During the year, 130,000 pounds of raw materials were purchased at $0.93 per pound. All materials purchased were used during the year.

If the materials price variance was $2,600 favorable, what was the standard materials price per pound? (Round answer to 2 decimal places, e.g. 2.75.)

SIDE NOTE: i keep getting .91 as my answer but that is incorrect

Oklahoma Manufacturing Company uses a standard cost accounting system. In 2012, the company produced 28,100 units. Each unit took several pounds of direct materials and 1½ standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,350 direct labor hours. During the year, 130,000 pounds of raw materials were purchased at $0.93 per pound. All materials purchased were used during the year.

If the materials price variance was $2,600 favorable, what was the standard materials price per pound? (Round answer to 2 decimal places, e.g. 2.75.)

SIDE NOTE: i keep getting .91 as my answer but that is incorrect

Explanation / Answer

Actual AQ*SR 130000*.93 120900+2600 favorable Variance 120900 123500 Standared rate 123500/130000 0.95

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