Diamond Company produces a single product. The company has set the following sta

Question

Diamond Company produces a single product. The company has set the following standards for materials and labor:

During the past month, the company purchased 5,800 pounds of direct materials at a cost of $13,630. All of this material was used in the production of 1,800 units of product. Direct labor cost totaled $93,150 for the month. The following variances have been computed:

Compute the standard price per pound of materials. (Round your intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.)

Compute the standard quantity allowed for materials for the month's production. (Round your intermediate calculations to 2 decimal places.)

Compute the standard quantity of materials allowed per unit of product. (Round your intermediate calculations to 2 decimal places.)

Compute the actual direct labor hours for the month.

Compute the labor rate variance. (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places. Omit the "$" sign in your response.)

Diamond Company produces a single product. The company has set the following standards for materials and labor:

Explanation / Answer

1)Direct materials:
Standard price=
Total Material variance= Direct material var+direct mterial Quantity variance
140=PQ*(AP-SP)-1020
PQ=Quantity purchased
AP=Actual price
SP=standard price

=5800*(13630-sp)

1160=1*(13630-sp)
sp=13630-1160=12,470
SP per unit= 12470/5800=$2.35

Direct material Quantity var=SP*(AQ-SQ)
SP=standard price
AQ= actual qunatity used
sq=STANDARD QUANTITY ALLOWED

-1020=(13630/1800)*(5800-x)
x=5934.7

Standard quantity per unit=5934.07/1800=3.29

2)Direct labour refficency=SR*(AH-SH)
SR=standard rate per hour'
AH=actual hours used
SH=standard hours allowed

3900=13*(AH-4*5934.4)
=6234.4

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