Problem 11-4A (Part Level Submission) Kansas Company uses a standard cost accoun
ID: 2459172 • Letter: P
Question
Problem 11-4A (Part Level Submission) Kansas Company uses a standard cost accounting system. In 2014, the company produced 28,500 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,160 direct labor hours. During the year, 130,800 pounds of raw materials were purchased at $0.92 per pound. All materials purchased were used during the year. LINK TO TEXT Collapse question part (a) If the materials price variance was $2,616 favorable, what was the standard materials price per pound? (Round answer to 2 decimal places, e.g. 2.75.) A)Standard Material Price per pound = $122,952 / 130,800 = $0.94 B) B.)If the materials quantity variance was $7,755 unfavorable, what was the standard materials quantity per unit?
Explanation / Answer
A. Material price variance = ( standard price- actual price ) x actual quantity used
$2616 = ( standard price - $0.92 ) x 130800
$2616 = standard price x 130800 - 0.92 x 130800
standard price x 130800 = $2616 + .0.92 x 130800
standard price x 130800 = $2616 + $120336
= $122952
standard price = $122952 / $ 130800
= $ 0.94
B.Material quantity variance = ( standard quantity - actual quantity ) x standard price
-$7,755 = ( standard quantity - 130800 ) x $0.94
-$7,755 = standard quantity x$ 0.94 - 130800 x $0.94
-$7,755 = standard quantity x $0.94 - $122952
standard quantity x $0.94 = $122952-$7755
standard quantity = $115197 / $0.94
= $ 122550.