Question

Johnston Co.'s direct materials costs is as follows: Standard price per pound $ 8.45 Actual quantity purchased 3,630 pounds Actual quantity used in production 3,530 pounds Units of product manufactured 900 Materials purchase-price variance–favorable $ 1,055 Budget data for the period: Units to manufacture 1,200 Units of direct materials 4,800 pounds The actual purchase price per pound of direct materials (rounded to two decimal places) was:

Answer 1

Actual cost per pound= $8.16

Step-by-step explanation:

A material price variance occurs where materials are purchased at a price either lower or higher than the standard price. A favorable variance is recorded where the actual total cost of materials is lower that the standard cost. While an adverse variance implies the opposite.

$

Standard cost of material purchased = (3,630× $8.45) 30,673.5

Actual cost of material y

Material price variance $ 1055 F

30,673.5 - y = 1055

y=30,673.5- 1,055

y= 29,618.5

Actual cost per pound = $29,618.5 /3,630= 8.158

Actual cost per pound= $8.16