During the month of March, Baker's Express purchased 10,000 pounds of flour at $1 per pound.At the end of March, Baker's Express found that it had a favorable materials price variance of $500.The standard cost per pound must be
A) $0.95
B) $1.00
C) $1.05
D) $1.95

Question

Quizplus · Accepted Answer

MPV = (AP- SP) × AQ
$500 = ($1 - SP) × 10,000
SP = $1.05
OR
(10,000 × $1.00) + 500 = $10,500
$10,500 / 10,000 = $1.05
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During the Month of March, Baker's Express Purchased 10,000 Pounds