Materials Variances-Working Backwards SMP Company has the following operating data for the month just completed:
Direct materials purchased 40,000 pounds
Direct materials used 38,000 pounds
Total cost of direct materials purchased $120,000
Standard price of direct materials $3.50 per pound
Direct materials usage variance-unfavorable $6,500
Required: Compute for SMP the following:
1. Purchase price per pound for direct materials.
2. Direct materials purchase-price variance.
3. Total standard quantity of direct materials allowed for units produced during the period.