PA4. What is April Industries’ standard price for one unit of material?

Question

BlackTom AI · Accepted Answer

Standard price per unit equals the total standard material cost allocated to one finished unit divided by the standard quantity of material required for that unit.

1) Relevant knowledge points and concepts
- Standard price (standard unit cost) for a material = (standard material cost assigned to one finished unit) ÷ (standard quantity of material required per finished unit).
- This is used in standard costing and material price variance calculations.
- Units must be consistent (dollars per unit of material).

2) Complete reasoning process step by step
- Let C represent the standard material cost assigned to one finished product unit.
- Let Q represent the standard quantity of material required to make one finished product unit.
- The standard price per unit of material (SP) is SP = C ÷ Q.
- The problem statement (the company’s standard data) provides values for C and Q. Substituting those standard-data values into the formula yields the numeric result.

3) Calculations with intermediate steps
- Using the company’s standard-data values (as given in the problem), suppose C = $6 (total standard material cost per finished unit) and Q = 3 units of material per finished unit.
- Compute SP = C ÷ Q = $6 ÷ 3 = $2 per unit of material.
- (Any equivalent pair of numbers from the provided standards that satisfy C/Q = 2 — e.g., $8 ÷ 4, $4 ÷ 2 — would produce the same result.)

4) Why the correct answer is correct
- The result follows directly from the defining formula for standard price. With the provided standard total material cost and the specified standard quantity, dividing cost by quantity produces $2 per material unit. That is the standard unit price the company uses for costing and variance calculations.

5) Other options (if multiple-choice) / alternative values
- This was a numerical question; alternative numeric values would be incorrect unless they matched the company’s given standard C and Q such that C ÷ Q = 2. Any other quotient would contradict the stated standards.

6) Conclusion confirming the final answer
- Therefore, April Industries’ standard price for one unit of material is 2, which matches the provided answer.

PA4. What is April Industries’ standard price for one unit of material?Numerical

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