Question

Problem 23-4A (Part Level Submission) Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,700 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,400 direct labor hours. During the year, 131,500 pounds of raw materials were purchased at $0.93 per pound. All materials purchased were used during the year. Collapse question part (a) Correct answer. Your answer is correct. If the materials price variance was $2,630 favorable, what was the standard materials price per pound? (Round answer to 2 decimal places, e.g. 2.75.) Standard materials price per pound $ Entry field with correct answer 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 Collapse question part (b) If the materials quantity variance was $6,508 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 1

a)

Material price variance = (Actual price – Standard price) x Actual quantity

-$ 2,630 = ($ 0.93 - Standard price) x 131,500        

-$ 2,630/131,500 = $ 0.93 - Standard price

- $ 0.02 = $ 0.93 - Standard price

Standard price = $ 0.93 + $ 0.02 = $ 0.95 per pound

b)

Material quantity variance = (Actual quantity - Standard quantity) x Standard price per pound

$ 6,508 = (131,500 - Standard quantity) x $ 0.95

$ 6,508/$ 0.95 = (131,500 - Standard quantity) x $ 0.95

            6850.526316 = (131,500 - Standard quantity)

Standard quantity = 131,500 - 6850.526316= 124649.4737

Standard quantity per unit = 124649.4737/27,700 = 4.499980999 or 4.5 pounds