Suver Corporation has a standard costing system. The following data are available for June: The actual price per pound of direct materials purchased in June was:
A) $6.88 per pound
B) $7.00 per pound
C) $7.10 per pound
D) $7.12 per pound

Question

Suver Corporation has a standard costing system. The following data are available for June:  The actual price per pound of direct materials purchased in June was:
A) $6.88 per pound 
B) $7.00 per pound 
C) $7.10 per pound 
D) $7.12 per pound

Quizplus · Accepted Answer

We need to find the actual price per pound of direct materials purchased in June, which is given by the formula:

Actual price per pound of direct materials purchased = Total cost of direct materials purchased ÷ Total quantity of direct materials purchased

From the given data, we know that the total cost of direct materials purchased was $162,400 and the total quantity of direct materials purchased was 23,000 pounds.

Therefore,

Actual price per pound of direct materials purchased = $162,400 ÷ 23,000 pounds 
= $7.043 per pound

Rounding this to the nearest cent gives us the answer of $7.10 per pound, which is choice C.

Suver Corporation Has a Standard Costing System