Shoemaker Perkins Company uses a standard cost system and had 380 pounds of raw

Question

Shoemaker Perkins Company uses a standard cost system and had 380 pounds of raw material X15 on hand on September 1. The standard cost is $9.37 per pound. The standard calls for 1.90 pounds of material X15 for each unit of the product manufactured. The company manufactured 560 units of the product in September, and had 480 pounds of Material X-15 in stock on September 30. The actual price for Material X-15 purchased during the month was $0.90 per pound below the standard cost. The material usage variance in September was $2,800 unfavorable. What is the standard cost of materials for the units produced in September? Shoemaker Perkins Company uses a standard cost system and had 380 pounds of raw material X15 on hand on September 1. The standard cost is $9.37 per pound. The standard calls for 1.90 pounds of material X15 for each unit of the product manufactured. The company manufactured 560 units of the product in September, and had 480 pounds of Material X-15 in stock on September 30. The actual price for Material X-15 purchased during the month was $0.90 per pound below the standard cost. The material usage variance in September was $2,800 unfavorable. What is the standard cost of materials for the units produced in September?

Explanation / Answer

Standard Cost of material for the units produced:- Calculation of actual units consumed:- No of units produced 560 units Standard Material Usage 1.9 Pound per Unit Total standard Usage (560*1.9) 1064 Pounds Material Usage Variance 2800 unfavorable Material Usage Variance (Actual Consumption-Std Consumption)*Std rate Accordingly, Actual Consumption = Material Usage Variance/Std rate+Std Consumption 2800/9.37+1064 1362.826 Pounds usage Standard Cost of material Actual Consumption*Std rate 1362.826*9.37 Standard Cost of material          12,770 S

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