Question

Standard Direct Materials Cost per Unit from Variance Data

The following data relating to direct materials cost for October of the current year are taken from the records of Good Clean Fun Inc., a manufacturer of organic toys:

Quantity of direct materials used	4,900 lbs.
Actual unit price of direct materials	$4.30 per lb.
Units of finished product manufactured	2,350 units
Standard direct materials per unit of finished product	2 lbs.
Direct materials quantity variance—unfavorable	$880
Direct materials price variance—favorable	$490

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.

Product finished		units
Standard finished product for direct materials used		units
Deficiency of finished product for materials used		units
Standard cost for direct materials	$	per unit

Answer 1

Requirement 1 Product Finished: Units of Finished products Manfactured 2350 Units Requirement 2 Standard Finished product for direct material used: Quantity of Direct materials used (A) Standard direct materials per unit of finished product (B) Standard Finished product for direct material used(A/B) 4900 lbs 2 lbs 2450 Units Requirement 3 Deficiency of Finished products for materials used: Units of Finished products Manfactured Standard Finished product for direct material used Deficiency of Finished products for materials used 2350 2450 100 Units Requirement 4 Standard cost for Direct Materials : Direct materials quantity variance-unfavorable (A) Deficiency of Finished products for materials used (B) $ 880.00 100 Units Standard cost for Direct Materials (A/B) $ 8.80