Shipp, Inc. manufactures a product requiring two pounds of direct material. During 2019, Shipp purchases 24,000 pounds of material for $99,200 when the standard price per pound is $4. During 2019, 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.

Question

Quizplus · Accepted Answer

The standard direct material cost per unit of finished product is calculated based on the standard cost and the standard quantity of material required per unit. Since the standard price per pound is $4 and each product requires two pounds of direct material, the standard direct material cost per unit is 2 pounds * $4/pound = $8.00.