Kansas Company uses a standard cost accounting system. In 2014, the company prod

Question

Kansas Company uses a standard cost accounting system. In 2014, the company produced 28,300 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $11.000. Normal capacity was 49,720 direct labor hours. During the year, 130,700 pounds of raw materials were purchased at $0.94 per pound. All materials purchased were used during the year. If the materials price variance was $3,921 favorable, what was the standard materials price per pound? *(b) If the materials quantity variance was $3,250 unfavorable, what was the standard materials quantity per unit? *(c) What were the standard hours allowed for the units produced? *(d) If the labor quantity variance was $4,950 unfavorable, what were the actual direct labor hours worked? Actual hours worked?

Explanation / Answer

Particulars Standard Actual Qty Rate amount Qty Rate amount Materials         127,350.00                      0.97         123,529.50         130,700.00                      0.94         122,858.00 Labour            45,280.00               11.0000         498,080.00            45,730.00 Actual Output in units            28,300.00 Direct Labour Hours required = 28,300*1.6            45,280.00 DMPV = (SP-AP)*AQ 3,921 = (SP - .94)130,700 Standard Price = .97 DMQV= (SQ-AQ)SP -3,250 = (SQ-130,700).97 -3,350 = SQ - 130,700 Standard Quantity = 127,350 Standard Qty per unit = 127,350/28,300 Standard Qty per unit = 4.50 Per unit DLEV = (SH-AH)SR -4,950 = (45,280 - AH)11 -450 = (45,280 - AH) AH = 45,730 Hours

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