Question

Suver Corporation has a standard costing system. The following data are available for June: Actual quantity of direct materials purchased Standard price of direct materials Material price variance Material quantity variance 70,000 pounds $ 8.00 per pound $ 7,000 Unfavorable $ 7,500 Favorable The actual price per pound of direct materials purchased in June was: Multiple Choice O $8.00 per pound O $7.88 per pound

Answer 1

Actual quantity of Direct Materials purchased = 70,000 pounds

Material Price variance = Actual quantity * (Standard unit cost - Actual unit cost)

- 7,000 = 70,000 * ($8 - Actual unit cost)

-0.10 = $8 - Actual unit cost

Actual unit cost = $8 + $0.10

Actual unit cost = $8.10

So, Actual unit cost = $8.10 per pound