During June, 16,000 pounds of materials were purchased at a cost of $6 per pound. If there was a favorable direct materials price variance of $3,000 in June, the standard cost per pound must be _____. (Round to two decimal places.)
A)$6.19
B)$5.81
C)$6.00
D)$0.19

Question

Quizplus · Accepted Answer

The favorable direct materials price variance indicates that the actual cost was less than the standard cost. The variance is calculated as (Standard Cost - Actual Cost) x Actual Quantity. Given a favorable variance of $3,000 and an actual quantity of 16,000 pounds, we can set up the equation: $3,000 = (Standard Cost - $6) x 16,000. Solving for Standard Cost gives $6.19 per pound.

During June, 16,000 Pounds of Materials Were Purchased at a Cost