Boxes Company has collected the following data for one of its products:
$$\begin{array} { | l | l | }
\hline \text { Direct materials standard (3 pounds @ \$1/lb.) } & \$ 3 \text { per finished good } \
\hline \text { Direct materials flexible budget variance-unfavorable } & \$ 14,000 \
\hline \text { Actual direct materials used } & 100,000 \text { pounds } \
\hline \text { Actual finished goods produced } & 25,000 \text { units } \
\hline
\end{array}$$ What is the actual cost of the direct materials used per pound?
A) $1.00
B) $.75
C) $.89
D) $1.11

Question

Boxes Company has collected the following data for one of its products:
$$\begin{array} { | l | l | } 
\hline \text { Direct materials standard (3 pounds @ \$1/lb.) } & \$ 3 \text { per finished good } \
\hline \text { Direct materials flexible budget variance-unfavorable } & \$ 14,000 \
\hline \text { Actual direct materials used } & 100,000 \text { pounds } \
\hline \text { Actual finished goods produced } & 25,000 \text { units } \
\hline
\end{array}$$ What is the actual cost of the direct materials used per pound?
A) $1.00
B) $.75
C) $.89
D) $1.11

Quizplus · Accepted Answer

The actual cost of the direct materials used per pound is calculated as follows:Actual cost of direct materials used = Direct materials flexible budget variance - unfavorable / Actual direct materials usedActual cost of direct materials used = $14,000 / 100,000 poundsActual cost of direct materials used = $0.14 per pound

Boxes Company Has Collected the Following Data for One of Its