In: Accounting
Problem 23-4A (Part Level Submission) Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,600 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $13.00. Normal capacity was 49,700 direct labor hours. During the year, 130,800 pounds of raw materials were purchased at $0.91 per pound. All materials purchased were used during the year. (a) Your answer is correct. If the materials price variance was $5,232 favorable, what was the standard materials price per pound? (Round answer to 2 decimal places, e.g. 2.75.) Standard materials price per pound $ Click if you would like to Show Work for this question: Open Show Work Show Solution Show Answer Link to Text Link to Text Attempts: 1 of 3 used (b) If the materials quantity variance was $14,136 unfavorable, what was the standard materials quantity per unit? (Round answer to 1 decimal place, e.g. 1.5.) Standard materials quantity per unit
Answer to Part (a) | |
Actual Quantity (AQ) | 130,800 |
Actual Price (AP) | 0.91 |
Standard Price (SP) | ??? |
Given, | |
Material Price Variance | 5232 Favorable |
AQ*(SP - AP) | 5232 |
130800 * (SP - 0.91) | 5232 |
SP - 0.91 | 5232/130800 |
SP - 0.91 | 0.04 |
SP | 0.04 + 0.91 |
Standard Price (SP) | 0.95 |
Standard Material Price per pound | $0.95 |
Answer to Part (b) | |
Given, | |
Material Quantity Variance | 14136 Unfavorable |
SP*(SQ - AQ) | -14136 |
0.95* (SQ - 130800) | -14136 |
(SQ - 130800) | -14136/0.95 |
(SQ - 130800) | -14880.00 |
SQ | -14880+130800 |
SQ | 115920.00 |
Standard Quantity required for Actual Output | 115,920 |
Actual output | 27600 |
Standard materials quantity per unit (115920/27600) | 4.20 |