The following direct material information is available for Company A\'s most rec

Question

The following direct material information is available for Company A's most recent month of operations: Standard price per unit of input.. . $16 per pound Actual price per unit of input.$14 per pound Direct Materials Price Variance... $120,000 F Total Direct Materials Variance ..$40,000 F The actual output during the period was 26,625 units. The direct materials inventory increased by 2,000 pounds during the period. The standard quantity of direct material allowed is O A. 1.81 pounds per unit O B. 2.25 pounds per unit ° C. 2.75 pounds per unit O D. 3.13 pounds per unit OE. 2.00 pounds per unit

Explanation / Answer

Actual quantity purchased = 120000/(16-14) = 60000 Direct materials quantity variance=120000-40000 = $80000 U 80000 = 16*(58000-26625*SQ) 5000 = 58000-26625*SQ SQ = 2.00 pounds per units Option E is correct

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