Lemke Industries purchased and consumed 80,000 gallons of direct material that was used in the production of 21,000 finished units of product. According to engineering specifications, each finished unit had a manufacturing standard of four gallons. If the material price varlance is $8,000 and the material quantity variance is $2,400F, what is the actual price paid for a gallon of direct material? Multiple Choice $0.60 $0.40 $0.70 None of the answers is correct Not enough information to judge

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Lemke Industries purchased and consumed 80,000 gallons of direct material that was used in the production of 21,000 finished units of product.
According to engineering specifications, each finished unit had a manufacturing standard of four gallons. If the material price variance is $8,000 and
the material quantity variance is $2,400F, what is the actual price paid for a gallon of direct material?
Multiple Choice
$0.60
$0.40
$0.70
None of the answers is correct
Not enough information to judge
Transcribed Image Text:Lemke Industries purchased and consumed 80,000 gallons of direct material that was used in the production of 21,000 finished units of product. According to engineering specifications, each finished unit had a manufacturing standard of four gallons. If the material price variance is $8,000 and the material quantity variance is $2,400F, what is the actual price paid for a gallon of direct material? Multiple Choice $0.60 $0.40 $0.70 None of the answers is correct Not enough information to judge
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