Saki, Inc. has a standard cost card for one unit of a certain finished product s
ID: 2417358 • Letter: S
Question
Saki, Inc. has a standard cost card for one unit of a certain finished product showing the following:
Standard Quantity
Standard Price
or Hours
or Rate
Direct materials
5.0
pounds
?
per pound
Direct labor
2.0
hours
$ 20
per hour
Variable manufacturing overhead
1.0
hours
$ 5
per hour
If the total standard variable cost for one unit of finished product is $130, then the standard price per pound for direct materials is:
$85.00
$9.00
$17.00
$26.00
Standard Quantity
Standard Price
or Hours
or Rate
Direct materials
5.0
pounds
?
per pound
Direct labor
2.0
hours
$ 20
per hour
Variable manufacturing overhead
1.0
hours
$ 5
per hour
Explanation / Answer
The Total Standard Variable Cost for one unit of finished product is $ 130
Therefore Standard Quantity x Standard Price = $ 130
Standard Quantity is given as 5 pound for one unit of finished product
Hence 5 pound x Standard Price = $ 130
Standard Price = $ 130 / 5
Standard Price = $ 26. Option D
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