Emerald Bazaar manufactures a product requiring two pounds of direct material. During 2020, Emerald Bazaar purchases 24,000 pounds of material for $99,200 when the standard price per pound is $4. During 2020, Emerald Bazaar uses 22,000 pounds to make 12,000 products. The standard direct material cost per unit of finished product is
calculated as follows:
Standard direct material cost per pound = $4
Standard direct material cost per unit = 2 pounds x $4 = $8
Therefore, the standard direct material cost per unit of finished product is $8.
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To calculate the standard direct material cost per unit of finished product, we need to find the total cost of direct material used and then divide it by the total number of units produced.
Firstly, let's calculate the total cost of direct material used:
Direct Material Used = Quantity of material used x Price per pound
Direct Material Used = 22,000 pounds x $4/pound
Direct Material Used = $88,000
Now, let's calculate the standard direct material cost per unit of finished product:
Direct Material Cost per Unit = Total Direct Material Cost / Total Number of Units Produced
Direct Material Cost per Unit = $88,000 / 12,000 units
Direct Material Cost per Unit = $7.33
Therefore, the standard direct material cost per unit of finished product for Emerald Bazaar is $7.33.