Question

Shipp, Inc. manufactures a product requiring two pounds of direct material. During 2013, Shipp purchases 24,000 pounds of material for $99,200 when the standard price per pound is $4. During 2013, Shipp uses 22,000 pounds to make 12,000 products. The standard direct material cost per unit of finished product is

a, $8.27
b, $9.01
c, $8.00
d, $8.53

Answer 1

c. $8.00 per unit

Step-by-step explanation:

Standard direct material cost per unit of finished product =

Raw material required for each unit of the product = 2 pounds

Therefore, raw material for 12,000 units of finished product = 12,000
`*` 2 = 24,000 pounds

Standard cost of 24,000 pounds of material for $4 per pound = 24,000
`*` $4 = $96,000

Cost per unit of finished product =
`(Cost)/(Number \: of\: units) = (96,000)/(12,000) = 8`

c. $8.00 per unit