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A company uses 20,000 pounds of materials for which it paid $6. 00 a pound. the materials price variance was $15,000 unfavorable. what is the standard price per pound?

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Sakshigupta4990idn

$7.75 is the standard price per pound.

Material price variance = (Actual quantity * Actual price) - (Actual quantity * Standard price)

$5,000 = (20,000 * $8) - (20,000 * Standard price)

$5,000 = $160,000 - (20,000 * Standard price)

(20,000 * Standard price) = $160,000 - $5,000

(20,000 * Standard price) = $155,000

Standard price = $155,000 / 20,000

= $7.75

Price is one of the basic economic categories. The standard price concept is most commonly defined as the monetary value of a commodity. Price performs the following interrelated functions. For finished goods, the cost is only manufacturing or procurement costs.

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