Question - Stratton Manufacturing Company uses a standard cost accounting system. In 2011, the company produced 28,000 units. Each unit took several pounds of direct materials and 11/2 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,000 direct labor hours. During the year, 131,000 pounds of raw materials were purchased at $0.92 per pound. All materials purchased were used during the year.
Answer questions about variances.
Instructions
(a) If the materials price variance was $2,620 favorable, what was the standard materials price per pound?
(b) If the materials quantity variance was $4,700 unfavorable, what was the standard materials quantity per unit?
(c) What were the standard hours allowed for the units produced?