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The total standard cost allowed for the actual output is $60,000. Two units of raw material are allowed for each unit produced, and the company produced 12,000 units. Therefore, the standard quantity allowed for the actual output was 12,000 × 2, or 24,000 units. The standard price for one unit of material was thus $60,000 ÷ 24,000 units of direct materials, or $2.50 per unit of direct materials.
This is the standard direct materials cost per unit of product. However, the question asks for the standard cost per unit of direct material.
This is the actual price per unit of raw materials purchased ($105,000 paid ÷ 35,000 units of raw materials purchased = $3), not the standard price per unit.
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