The standard cost card for one unit of a finished product shows the following: If the total standard variable cost for one unit of finished product is $78, then the standard price per foot for direct materials is:
A)$2
B)$3
C)$4
D)$5

Question

The standard cost card for one unit of a finished product shows the following:  If the total standard variable cost for one unit of finished product is $78, then the standard price per foot for direct materials is:
A)$2 
B)$3 
C)$4 
D)$5

Quizplus · Accepted Answer

According to the standard cost card, the direct materials cost per unit consists of 20 feet of material at a standard price of $4 per foot. Therefore, the total standard cost of direct materials per unit is $4 x 20 = $80. Given that the total standard variable cost for one unit is $78, we can divide this amount by the number of feet of materials to find the standard price per foot: $78/20 = $3.90, which rounds up to $4. Therefore, the standard price per foot for direct materials is $4. The correct choice is C. Standard variable cost per unit = Standard direct materials cost per unit + Standard direct labor cost per unit + Standard variable manufacturing overhead cost per unit
$78 per unit = (12 feet per unit × SP)+ (1.5 hours per unit × $12 per hour)+ (1.5 hours per unit × $8 per hour)
$78 per unit = (12 feet per unit × SP)+ ($18 per unit)+ ($12 per unit)
12 feet per unit × SP = $78 per unit - $18 per unit - $12 per unit
12 feet per unit × SP = $48 per unit
SP = $48 per unit ÷ 12 feet per unit
SP = $4 per foot

The Standard Cost Card for One Unit of a Finished