Accounting for Decision Making and Control 6th Edition by Jerold Zimmerman

Exercise 17

Seville Techtronics, a manufacturer of subcomponents for a large power supplier, uses a standard cost system. One particular product, M-303, called for a silver-iridium compound that Seville did not have in inventory. Seville purchased the compound and used a portion of it in producing M-303. Upon purchase, the compound was recorded in the raw materials inventory at standard price. The following data summarize the disposition of the silver-iridium compound:

Required:
a. Calculate the standard quantity (in pounds) of the silver-iridium compound that Seville should have used in producing M-303.
b. Calculate the number of pounds of the silver-iridium compound initially purchased.
c. Calculate the standard price per pound of the silver-iridium compound.
d. Calculate the actual price paid per pound of the silver-iridium compound.