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Norio Manufacturing uses powdered plastics (PPS) to manufacture a high-pressure board used in a digital equipment product, Flex 10. Information concerning its operation in June
Norio Manufacturing uses powdered plastics (PPS) to manufacture a high-pressure board used in a digital equipment product, Flex 10. Information concerning its operation in June is as follows:
Budgeted units of Flex 10 for June | 5,000 | |||
Budgeted usage of PPS | 45,000 | pounds | ||
Actual number of units of Flex 10 manufactured | 4,000 | |||
PPS purchased | 43,200 | pounds | ||
PPS used | 39,000 | pounds | ||
Total actual cost of PPS used | $ | 224,640 | ||
Direct materials usage variance | $ | 21,600 | unfavorable | |
Assume that Norio does not maintain an inventory of materials, so that the amount of materials used is equal to the amount of materials purchased. The standard cost per pound of PPS (to two decimal places) is:
Multiple Choice
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$5.76.
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$6.24.
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$5.20.
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$6.84.
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$7.20.
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