Venda Company purchased and used 40,000 pound of materials in production. It paid $6.00 per pound for these materials. If the direct materials (DM) price variance was $50,000 favorable, what was the standard price per pound?
A) $4.25
B) $5.75
C) $7.25
D) $9.30

Question

Quizplus · Accepted Answer

Direct Materials (DM) Price Variance, $50,000 F = (AQ x AP) - (AQ x SP) = (40,000 x $6) - (40,000 x SP); SP = $7.25

Venda Company Purchased and Used 40,000 Pound of Materials in Production