Standard Direct Materials Cost per Unit from Variance Data The following data re

Question

Standard Direct Materials Cost per Unit from Variance Data The following data relating to direct materials cost for November of the current year are taken from the records of Play Tyme Inc., a manufacturer of plastic toys: Quantity of direct materials used 7,500 lbs. Actual unit price of direct materials $4.00 per lb.Units of finished product manufactured 1,795 units Standard direct materials per unit of finished product 4 lbs. Direct materials quantity variance-unfavorable $1,376 Direct materials price variance-favorable $2,250 Determine the standard direct materials cost per unit of finished product, assuming that there was no inventory of work in process at either the beginning or the end of the month. If required, round your standard cost per unit answer to two decimal places.Product finished

Explanation / Answer

Quantity of Material used            7,500 lbs

Actual Quantity 1795 units

Actual Price        $4.00lb

Standard Quantity           7500/4lbs = 1875 Units

standard price = To findout standard price we have to use formula for Material price variance = $2,250

Material Price Variance = Actual Qunatity ( Standard Price - Actual Price)

$2,250 = 1795 ( S.P. - 4)

$2250 = 1795S.P. - 7180

$2,250 + $7,180 = 1795 S.P.

Standard Price = $9430 / 1795 = $5.25

Product Finished 1795Units Standard Finished product for Direct Material used 1875Units Deficiency of Finished products for material used 80Units Standard Cost for Direct Materials $5.25

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