Mover Company has developed the following standards for one of its products: The following activity occurred during March:
The company records materials price variances at the time of purchase. The variable standard cost per unit for materials and labor is
A) $98.
B) $84.
C) $74.
D) $38.

Question

Mover Company has developed the following standards for one of its products:  The following activity occurred during March:
 The company records materials price variances at the time of purchase. The variable standard cost per unit for materials and labor is
A) $98. 
B) $84. 
C) $74. 
D) $38.

Quizplus · Accepted Answer

The variable cost per unit is calculated as follows:
Direct Materials (5 lbs. at $6 per lb.) = $30
Direct Labor (1.5 hrs. at $24 per hr. ) = $36
Variable Overhead = $18
Total Variable Cost per unit = $84

The question states that the materials price variances are recorded at the time of purchase, so there's no need to adjust the materials cost. Therefore, the variable cost per unit is equal to the standard cost per unit, which is $84. Therefore, the answer is B.

Mover Company Has Developed the Following Standards for One of Its