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: 7,100 lbs. Quantity of direct materials used Actual unit price of direct materials $3.80 per lb. 3,410 units Units of finished product manufactured 2 lbs Standard direct materials per unit of finished product Direct materials quantity variance-unfavorable $1,092 Direct materials price variance-favorable $710 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 units Standard finished product for direct materials used units Deficiency of finished product for materials used units Standard cost for direct materials per unit

Answer 1

Requirement 1 Product Finished: Units of Finished products Manfactured 3410 Units Requirement 2 Standard Finished product for direct material used: Quantity of Direct materials used (A) Standard direct materials per unit of finished product (B) Standard Finished product for direct material used(A/B) 7100 lbs 2 lbs 3550 Units Requirement 3 Deficiency of Finished products for materials used: Units of Finished products Manfactured Standard Finished product for direct material used Deficiency of Finished products for materials used 3410 3550 140 Units Requirement 4 Standard cost for Direct Materials : Direct materials quantity variance-unfavorable (A) Deficiency of Finished products for materials used (B) $1,092.00 140 Units Standard cost for Direct Materials (A/B) $ 7.80