Inezza Industries purchased and consumed 72,000 gallons of direct material that was used in the production of 15,000 finished units of product. According to engineering specifications, each finished unit had a manufacturing standard of five gallons. If the material price variance is $7,200U and the material quantity variance is $2,400F, what is the actual price paid for a gallon of direct material?

Principles of Accounting Volume 2
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ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 8EA: Queen Industries uses a standard costing system in the manufacturing of its single product. It...
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Inezza Industries purchased and consumed 72,000 gallons of direct material that was used in the production of 15,000 finished units of product. According to engineering specifications, each finished unit had a manufacturing standard of five gallons. If the material price variance is $7,200U and the material quantity variance is $2,400F, what is the actual price paid for a gallon of direct material?

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