Answered: During December, 6,000 pounds of raw…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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During December, 6,000 pounds of raw materials were purchased at a cost of $16 per pound. If there was an unfavourable materials price variance of $6,000 for December, the standard cost per pound must be

$17

$16

$15

none of the above

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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