Kilo Company uses a standard costing system that allows 2.0 pounds of direct materials for one finished unit of product. During July, the company purchased 56,000 pounds of direct materials for $515,200 and manufactured 13,600 finished units. The standard direct materials cost allowed for the units manufactured is $244,800. The performance report shows that Kilo has an unfavorable direct materials usage variance of $7,800. Also, the company records any price variance for materials at the time of purchase.

What was the direct materials purchase-price variance in July?

To determine the direct materials purchase-price variance in July for Kilo Company, we can follow these steps:

1. Calculate the actual price per pound of direct materials purchased:
Actual price per pound = Total cost of direct materials purchased / Total pounds of direct materials purchased
Actual price per pound = $515,200 / 56,000 pounds
Actual price per pound = $9.20

2. Calculate the standard price per pound of direct materials used:
Standard cost allowed = $244,800
Total standard pounds used = 13,600 finished units * 2.0 pounds per unit
Total standard pounds used = 27,200 pounds
Standard price per pound = Standard cost allowed / Total standard pounds used
Standard price per pound = $244,800 / 27,200 pounds
Standard price per pound = $9.00

3. Calculate the direct materials purchase-price variance:
Direct materials purchase-price variance = (Actual price per pound - Standard price per pound) * Total pounds of direct materials purchased
Direct materials purchase-price variance = ($9.20 - $9.00) * 56,000 pounds
Direct materials purchase-price variance = $0.20 * 56,000 pounds
Direct materials purchase-price variance = $11,200 (unfavorable)

To know more about business, visit:

https://brainly.com/question/21306506

#SPJ11