The Southside Corporation budgeted 4600 pounds of direct materials to make 2700 units of product. The company actually used 5700 pounds of direct materials to make the 2700 units. The direct materials quantity variance is $1200 unfavorable. What is the Standard Price (SP)per pound of direct materials?
A)$0.44
B)$2.25
C)$4.75
D)$1.09

Question

Quizplus · Accepted Answer

The direct materials quantity variance is calculated as (Actual Quantity - Standard Quantity) * Standard Price. Given that the variance is $1200 unfavorable and the actual quantity used is 5700 pounds while the standard quantity budgeted is 4600 pounds, we have: (5700 - 4600) * SP = $1200. Solving for SP gives SP = $1200 / 1100 = $1.09 per pound.

The Southside Corporation Budgeted 4600 Pounds of Direct Materials to Make