Standard Direct Materials Cost per Unit from Variance Data The following data re

Question

Standard Direct Materials Cost per Unit from Variance Data

The following data relating to direct materials cost for November of the current year are taken from the records of Play Tyme Inc., a manufacturer of plastic toys:

Determine the standard direct materials cost per unit of finished product, assuming that there was no inventory of work in process at either the beginning or the end of the month. If required, round your standard cost per unit answer to two decimal places.

Quantity of direct materials used 6,700 lbs. Actual unit price of direct materials $2.60 per lb. Units of finished product manufactured 3,220 units Standard direct materials per unit of finished product 2 lbs. Direct materials quantity variance—unfavorable $728 Direct materials price variance—favorable $1,340

Explanation / Answer

Solution :
Product finished = 3220 units
Standard finished product for direct materials used (6700 /2)= 3350 units
Deficiency of finished product for materials used (3220 -3350)= 130 units
Standard cost for direct materials (728/130) = $ 5.60per unit

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