Lily Company uses a standard cost accounting system. In 2025, the company produced 28,300 units. Each unit took several pounds ofdirect materials and 1.6 standard hours of direct labor at a standard hourly rate of $13.00. Normal capacity was 49,900 direct laborhours. During the year, 131,200 pounds of raw materials were purchased at $0.94 per pound. All materials purchased were usedduring the year.(a)If the materials price variance was $1,312 favorable, what was the standard materials price per pound? (Round answer to 2 decimalplaces, e.g. 2.75.)Your answer is correct.(b)Standard materials price per pound $(c)eTextbook and MediaYour answer is correct.If the materials quantity variance was $17,100 unfavorable, what was the standard materials quantity per unit?Standard materials quantity per uniteTextbook and MediaWhat were the standard hours allowed for the units produced?Standard hours allowed0.95hours4Attempts: 1 of 5 usedpoundsAttempts: 4 of 5 used

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Description: Lily Company uses a standard cost accounting system. In 2025, the company produced 28,300 units. Each unit took several pounds ofdirect materials and 1.6 standard hours of direct labor at a standard hourly rate of $13.00. Normal capacity was 49,900

The labor variance is calculated as the difference between the cost of standard hours allowed and…

Answered: c) What were the standard hours allowed…

Business

Accounting

c) What were the standard hours allowed for the units produced? Standard hours allowed hours

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

Topic Video

Question

Lily Company uses a standard cost accounting system. In 2025, the company produced 28,300 units. Each unit took several pounds of
direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $13.00. Normal capacity was 49,900 direct labor
hours. During the year, 131,200 pounds of raw materials were purchased at $0.94 per pound. All materials purchased were used
during the year.
(a)
If the materials price variance was $1,312 favorable, what was the standard materials price per pound? (Round answer to 2 decimal
places, e.g. 2.75.)
Your answer is correct.
(b)
Standard materials price per pound $
(c)
eTextbook and Media
Your answer is correct.
If the materials quantity variance was $17,100 unfavorable, what was the standard materials quantity per unit?
Standard materials quantity per unit
eTextbook and Media
What were the standard hours allowed for the units produced?
Standard hours allowed
0.95
hours
4
Attempts: 1 of 5 used
pounds
Attempts: 4 of 5 used

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