You have been given the following information about the production of Usher Co.,

Question

You have been given the following information about the production of Usher Co., and are asked to provide the plant manager with information for a meeting with the vice president of operations.

The following is a variance report for the most recent period of operations.

Variances

Costs

Total Standard Cost

Price

Quantity

What was the actual cost per pound of raw materials? (Round answer to 2 decimal places, e.g. 1.25.)

Standard Cost Card Direct materials (9 pounds at $4 per pound) $36.00 Direct labor (0.80 hours at $7) 5.60 Variable overhead (0.80 hours at $3 per hour) 2.40 Fixed overhead (0.80 hours at $8 per hour) 6.40 $50.40

Explanation / Answer

Calculate actual cost per pound :

Direct material rate variance = (Standard rate-actual rate)actual quantity

5770 = (4X-410430)

-4X = -416200

X(Actual Quantity) = 104050

Actual cost per pound = 410430/104050 = 3.94 per pound

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