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 Actual unit price of direct materials Units of finished product manufactured Standard direct materials per unit of finished product Direct materials quantity variance-unfavorable Direct materials price variance-favorable 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 6,900 lbs $3.2 per Ib 3,310 units 2 lbs $952 $1,380 Standard finished product for direct materials used Deficiency of finished product for materials used Standard cost for direct materials units units units per unit

Explanation / Answer

Calculation of Deficiency of Finished product for material used

Std Direct Material per unit of Finished product = 2 lbs, so if there is 6900 lbs of direct material, Standard finished product that could be produced = 6900/2 = 3450 lbs but my actual production is 3310 units

Therefore, Deficiency of Finished Product for material used = 3450-3310= 140 units

Calculation of Standard Direct Material Cost Per unit

Direct Material Quantity Variance = (Standard Direct Material for 3310 units - Actual Direct Material used)* Standard

Direct Material Cost per Unit

-952 = [(2*3310) - 6900]* Standard Direct Material Cost per Unit

-952 = (6620-6900)*Standard Direct Material Cost per Unit

or, Standard Direct Material Cost per Unit * -280 = -952

Therefore, Standard Direct Material Cost per Unit = -952/-280 = $ 3.4

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