Computing actual price paid for gallon of direct material

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Reference no: EM13142380

Courtney purchased and consumed 50,000 gallons of direct-material that was used in the production of 11,000 finished units of product. According to engineering specifications, each finished unit had a manufacturing standard of five gallons. If a review of Courtney's accounting records at the end of the period disclosed a material price variance of $5,000U and a material quantity variance of $3,000F, determine the actual price paid for a gallon of direct material.

A. $0.50

B. $0.60

C. $0.70

D. An amount other than those shown above

E. Not enough information to judge

Reference no: EM13142380

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