Question

four leaf clovers, inc. ran into some unfortunate luck when their computer system crash. as a result of the crash, valuable information regarding direct material purchases and usage were stolen. a manager was able to pull previous records and determined that 3,000 fewer feet were used in the production of 50,000 units of one of its products last period than were purchased. data also shows that the total direct material variance for the material was $10,000 unfavorable. the direct material price variance was documented to be $150,000 favorable, which resulted from the actual cost per foot of direct material being $4.00 lower than the expected cost of $10.00 per foot. additional documentation regarding the direct materials quantity variance could not be found. how many feet were expected to be used to produce one unit of the product? question 5 options: 0.333 feet 0.974 feet 0.946 feet 0.394 feet 0.986 feet

Answer 1

The expected usage per unit of product is not clearly determinable from the given options, given the calculated expected usage is 0.86 feet per unit, which doesn't match the provided options. It seems additional information might be required or there may be a mistake in the options provided.

Step-by-step explanation:

The student has asked about how to calculate the expected feet used per unit when given certain variances and cost information. To solve the problem, we first identify that the total direct material variance is the sum of the direct material price variance and the direct material quantity variance. We have the total direct material variance ($10,000 unfavorable) and the direct material price variance ($150,000 favorable). This means we can find the direct material quantity variance by subtracting the price variance from the total variance, which shows us an unfavorable $160,000 quantity variance.

Since the actual price per foot is $4.00 less than expected, at $6.00 per foot, and the quantity variance is the difference in quantities multiplied by the standard price, we can calculate the standard quantity expected to be used. We divide the quantity variance by the $4.00 price difference to find out how many feet correspond to the $160,000 variance. This gives us 40,000 feet, indicating that 40,000 more feet were used than expected.

The problem states that 3,000 fewer feet were used in the production of the 50,000 units than were actually purchased. Therefore, the expected usage would have been 3,000 feet less than was purchased, so we add the 3,000 feet to the 40,000 feet excess used to get 43,000 feet expected to be used.

To find the expected usage per unit, we divide the 43,000 feet by the number of units (50,000), getting 0.86 feet per unit, which is not one of the provided options. Therefore, either more information is needed, or there may be a typo in the question's options.