Question
Your Company makes a single product. Only one kind of direct material is used to make this product. The company uses a standard cost system.
Your Company makes a single product. Only one kind of direct material is used to make this product. The company uses a standard cost system. The company's cost records for June show the following data:
| Number of units produced............. | 10,000 |
|
| Material price variance.................. | $28,000 | Favorable |
| Material quantity variance............. | $20,000 | Unfavorable |
| Actual direct material used............ | 21,000 | pounds |
| Direct materials standard price...... | $8 | per pound |
What is the per UNIT standard cost of direct material for one unit?
a. $19.60
b. $14.80
c. $ 1.86
d. $14.00
e. $18.80
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