The standard cost card for one unit of a certain finished product shows the following: If the total standard variable cost for one unit of finished product is $85, then the standard price per pound for direct materials is:

Question

The standard cost card for one unit of a certain finished product shows the following:  If the total standard variable cost for one unit of finished product is $85, then the standard price per pound for direct materials is:

Quizplus · Accepted Answer

Standard variable cost per unit = Standard direct materials cost per unit + Standard direct labor cost per unit + Standard variable manufacturing overhead cost per unit
$85 per unit = (10 pounds per unit × SP)+ (2.5 hours per unit × $16 per hour)+ (1.5 hours per unit × $10 per hour)
$85 per unit = (10 pounds per unit × SP)+ ($40 per unit)+ ($15 per unit)
10 pounds per unit × SP = $85 per unit - $40 per unit - $15 per unit
10 pounds per unit × SP = $30 per unit
SP = $30 per unit ÷ 10 pounds per unit
SP = $3 per pound

The Standard Cost Card for One Unit of a Certain