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 October of the current year are taken from the records of Good Clean Fun Inc., a manufacturer of organic toys:

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.

Quantity of direct materials used 7,600 lbs. Actual unit price of direct materials $4.9 per lb. Units of finished product manufactured 3,650 units Standard direct materials per unit of finished product 2 lbs. Direct materials quantity variance—unfavorable $1,500 Direct materials price variance—favorable $760

Explanation / Answer

Product finished =3,650 units
standard finished product for direct material used =7600/2=3,800 units
deficiency of finished product for materials used =3650-1500=2,150 units
standard cost for direct material =1500/2150=$ 0.70 per unit

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