Precilla Company Uses a Standard Costing System That Allows 2

Multiple Choice

Precilla Company uses a standard costing system that allows 2 pounds of direct materials for one finished unit.During July,the company purchased 40,000 pounds of direct materials for $210,000 and manufactured 12,000 finished units.The standard direct materials cost allowed for the units manufactured is $120,000.The performance report shows that Pricilla has an unfavorable direct materials usage variance of $5,000.Also,the company records any price variance for materials at time of purchase.
Precilla's standard price per pound of direct materials is:

A) $4.00.
B) $5.00.
C) $6.00.
D) $10.00.
E) $12.00.