The Bowden Corporation makes a single product. Only one kind of direct material is used to make this product. The company uses a standard cost system. The company's cost records for June show the following data:
There were no beginning inventories of direct materials.
-The actual cost of direct material was:
A) $8.12 per pound
B) $8.00 per pound
C) $7.60 per pound
D) $7.42 per pounds

Question

The Bowden Corporation makes a single product. Only one kind of direct material is used to make this product. The company uses a standard cost system. The company's cost records for June show the following data:
  There were no beginning inventories of direct materials.
-The actual cost of direct material was:
A) $8.12 per pound 
B) $8.00 per pound 
C) $7.60 per pound 
D) $7.42 per pounds

Quizplus · Accepted Answer

Materials price variance = AQ × (AP - SP)
$8,400 F = 21,000 pounds × (AP - $8 per pound)
-$8,400 = 21,000 pounds × (AP - $8 per pound)
-$8,400 = (21,000 pounds × AP) - $168,000
21,000 pounds × AP = $168,000 - $8,400
21,000 pounds × AP = $159,600
AP = $159,600 ÷ 21,000 pounds = $7.60 per pound

The Bowden Corporation Makes a Single Product