Osmond Manufacturing Company produces a single product. The following data apply

Question

Osmond Manufacturing Company produces a single product. The following data apply to the standard cost of materials and labor associated with making the product.


Materials quantity per unit 1 pound
Materials price $ 5.20 per pound
Labor quantity per unit 2 hours
Labor price $ 9.20 per hour

During the year, the company made 1,840 units of product. At the end of the year, the following variances had been calculated.


Materials usage variance $ 520 Favorable
Materials price variance $ 174 Unfavorable
Labor usage variance $ 2,024 Unfavorable
Labor price variance $ 2,925 Favorable

Required:
a. Determine the actual amount of materials used.

Actual quantity per pounds

b.

Determine the actual price paid per pound for materials. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Actual price $ per pound

c. Determine the actual labor hours used.

Actual labor hours

d.

Determine the actual labor price per hour. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Actual price $ per hour

Explanation / Answer

a) Materials usage variance = (Actual quantity used × Standard price) - (Standard quantity allowed × Standard price) Standard quantity allowed = 1,840 *1 = 1,840 pounds -$ 520 = (Actual quantity used-1,840 )*$ 5.20 Actual quantity used =1740 pounds b)Materials price variance = (Actual quantity purchased × Actual price) - (Actual quantity purchased × Standard price) $ 174 = 1740*(Actual Price -5.2) Actual Price = $5.3 c)Labor usage variance = (Actual hours worked × Standard rate) - (Standard hours allowed × Standard rate) Standard hours allowed = 1,840*2 = 3680 hours $ 2,024 = (Actual hours worked -3680)*$ 9.20 Actual hours worked = 3900 hours d)Labor rate variance = (Actual hours worked × Actual rate) - (Actual hours worked × Standard rate) -$ 2,925 = 3900 *(Actual rate -$ 9.20) Actual rate =$8.45

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