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A company uses 39400 kilograms of materials for which they paid $8.00 a kilogram. The materials...

A company uses 39400 kilograms of materials for which they paid $8.00 a kilogram. The materials price variance was $153660 favourable. What is the standard price per kilogram? $3.90 $4.10 $9.00 $11.90

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Answer #1

Actual quantity = 39,400 Kilograms

Direct material price variance = $153,660

Actual price  = 8 per kilograms

Standard Price = ?

Direct material price variance = Actual quantity x (Standard Price - Actual price )

153,660 = 39,400 x (Standard price - 8)

153,660/39,400 = standard price - 8

3.9 = standard price - 8

Standard price = $11.9 per kilograms

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