please help!! Sharp Company manufactures a product for which the following stand

ID: 2490986 • Letter: P

Question

please help!!

Sharp Company manufactures a product for which the following standards have been set: Standard Quantity Standard Price Standard Direct materials Direct labor or Hours 3 feet ? hours or Rate $5 per foot ? per hour Cost S 15 During March, the company purchased direct materials at a cost of $44,100, all of which were used in the production of 2,350 units of product. In addition, 4,800 hours of direct labor time were worked on the product during the month. The cost of this labor time was $40,800. The following variances have been computed for the month: Materials quantity variance Labor spending variance Labor efficiency variance $1,500 U $3,200 U $ 800 U Required: 1. For direct materials a. Compute the actual cost per foot for materials for March. (Round your answer to 2 decimal places.) Actual cost per foot

Explanation / Answer

a)Material quantity variance = ( AQ – SQ allowed) SR

1,500 = ( x – 2,350*3) 5

1,500 = 5x -35,250

5x =36,750

So x = 7,350 foot

Actual cost = 44,100/ 7,350

=$6 per foot

B) Material price variance = (AR – SR) AQ

($6 - $5) 7,350

=7,350(U)

c) Spending variance = actual – budgeted expense

44,100 – 2,350*15

=$8,850(U)

Labor

Labor spending variance = (AR – SR) AH

3,200 = (40,800 – 4800x)

4800x = 37,600

X = 7.83

Or 40,800/4,800 = $8.5 per hour

(8.5 – x) 4,800 = 32,00

40,800 – 4800x = 32,00

-4800x = 3,200 – 40,800

X =37,600/4,800

=7.833333333

Standard direct labor rate per hour = $7.83

Labor Efficiency variance = ( AH – SH allowed) SR

800 = (4800 – x)7.83

800 = 37,600 – 7.833x

X= 4,698

Standard hours per unit = 1.90 per hour