Regal Dog Food Company's standard quantity of direct materials is fifty pounds for each bag of premium dog food that it manufactures; the standard price is $.50 per pound. During the most
recent month, Regal manufactured 1,200 bags of premium dog food; 64,000 pounds of direct
materials were actually purchased and used. The direct materials price variance for the month was
$3,200 unfavorable. What was the actual cost per pound of direct materials?

Question

Regal Dog Food Company's standard quantity of direct materials is fifty pounds for each bag of premium dog food that it manufactures; the standard price is $.50 per pound. During the most
 recent month, Regal manufactured 1,200 bags of premium dog food; 64,000 pounds of direct
 materials were actually purchased and used. The direct materials price variance for the month was
 $3,200 unfavorable. What was the actual cost per pound of direct materials?

Quizplus · Accepted Answer

The actual cost per pound of direct materials can be calculated by first determining the total actual cost of the materials. Given that the direct materials price variance was $3,200 unfavorable, this means the actual cost was $3,200 more than the standard cost. The standard cost for the materials (50 pounds per bag at $.50 per pound for 1,200 bags) would be 50 * 1,200 * $.50 = $30,000. The actual cost, therefore, was $30,000 + $3,200 = $33,200. Since 64,000 pounds of materials were purchased and used, the actual cost per pound is $33,200 / 64,000 = $.52. However, there seems to be a mistake in my calculation as $.52 is not an option provided. Let's correct the calculation:The direct materials price variance is calculated as (Actual Price - Standard Price) * Actual Quantity. Given the variance is $3,200 unfavorable and the actual quantity is 64,000 pounds, we can set up the equation:(Actual Price - $0.50) * 64,000 = $3,200Solving for the Actual Price gives us:Actual Price = $3,200 / 64,000 + $0.50 = $0.05 + $0.50 = $0.55Therefore, the actual cost per pound of direct materials was $.55.

Regal Dog Food Company's Standard Quantity of Direct Materials Is