HERE IS THE PROBLEM AND THE ANSWER. I AM HAVING TROUBLE DETERMINE WHAT FORMULA WAS USED, IF ANY, AND UNDERSTANDING THE CONCEPT.


Here is the problem

Material Variances---Working Backwards

Joseph Company's direct materials costs are as follows:

Standard price per pound of direct materials $ 10.00
Direct materials purchased (pounds) 2,000
Total standard direct materials (pounds) for product manufactured 1,600
Direct materials used in production (pounds) 1,800
Direct materials purchase price variance - favorable 400

Required compute the following:

1. The actual purchase price per pound of direct material (rounded to the nearest penny)

2. The direct materials usage variance

?ANSWER

WHAT IS THE CORRECT FORMULA --- I CAN'T FIGURE IT OUT??


2,000 lbs ($10 - ?) = 400 favorable

400 DIVIDED BY 2,000 = .20 LB

$ 10 (1600 LBS - 1800 LBS) = 2,000 UNFAVORABLE

Go visit this thread and see what you can figure out, and then come back with any specific questions you have:
https://www.askmehelpdesk.com/financ...ls-408130.html