Sharp Company manufactures a product for which the following standards have been

Question

Sharp Company manufactures a product for which the following standards have been set:

     During March, the company purchased direct materials at a cost of $54,615, all of which were used in the production of 3,050 units of product. In addition, 5,000 hours of direct labor time were worked on the product during the month. The cost of this labor time was $30,000. The following variances have been computed for the month:

Compute the actual cost per foot for materials for March. (Round your answer to 2 decimal places.)

          

Compute the price variance and the spending variance. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance))

          

Compute the standard direct labor rate per hour. (Do not round intermediate calculations.)

            

Compute the standard hours allowed for the month’s production.

            

Compute the standard hours allowed per unit of product. (Round your answer to 1 decimal place.)

Standard Quantity
or Hours Standard Price
or Rate Standard
Cost   Direct materials 3 feet $ 5 per foot $ 15   Direct labor ? hours ? per hour ?

Explanation / Answer

Answer 1. a. Material quantity Variance = SQ X SR - AQ X SR SQ = 3 Feet X 3050 Units = 9150 Feets SR = $5 per Feet Therefore, -3900 = 9150 X $5 - AQ X $5 AQ = 9930 Feets Answer 1. b. Material Price Variance = (SR - AR) X AQ AR = $54615 / 9930 feets = $5.50 per feet Material Price Variance = ($5 - $5.50) X 9930 Material Price Variance = $4965 (U) Answer 2. a Labour Rate Variance = (SR - AR) X AH -5600 = (SR - 6) X 5000 Hrs SR = $4.88 per hr. Answer 2. b Labour Efficiency Variance = (SH - AH) X SR -600 = (SH - 5000) X $4.88 SH = 4877.049 or 4877 hrs Answer 2. c SH allowed per Unit = 4877 Hrs / 3050 Units = 1.599016 Hrs or 1.60 Hrs per Unit

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.