Precilla Company Uses a Standard Costing System That Allows 2

question 66

Multiple Choice

Precilla Company uses a standard costing system that allows 2 pounds of direct materials for one finished unit.During July,the company purchased 40,000 pounds of direct materials for $210,000 and manufactured 12,000 finished units.The standard direct materials cost allowed for the units manufactured is $120,000.The performance report shows that Pricilla has an unfavorable direct materials usage variance of $5,000.Also,the company records any price variance for materials at time of purchase.
Precilla's standard price per pound of direct materials is:

• A)$4.00.
• B)$5.00.
• C)$6.00.
• D)$10.00.
• E)$12.00.

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