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: Standard Quantity Standard Price Standard or Hours 3 feet ? hours Cost 15 or Rate Direct materials Direct labor $5 per foot ? per hour During March, the company purchased direct materials at a cost of $53,730, all of which were used in the production of 2,875 units of product. In addition, 4,700 direct labor-hours were worked on the product during the month. The cost of this labor time was $37,600 The following variances have been computed for the month Materials quantity variance Labor spending variance Labor efficiency variance $ 1,650 U $3,100 u $750 U Required 1. For direct materials a. Compute the actual cost per foot of materials for March. b. Compute the price variance and the spending variance 2. For direct labor: a. Compute the standard direct labor rate per hour b. Compute the standard hours allowed for the month's production. c. Compute the standard hours allowed per unit of product.

Explanation / Answer

Std quantity for actual output (2875*3): 8625 foot Std price per foot: $ 5 Material quanitty variance: $ 1650 U Material Quantity variance: Std price (Std quantity -Actual Quanntity) 1650 U    =   5.00 (8625 - Actual Quantity) Actual Quantity = 8955 foot Actual material incurred: $ 53730 Actual price per foot: (53730/8955)= $ 6.00 per foot Material Price variance: Actual Qty (Std price-Actual Price) 8955 (5.00-6.00)+ 8955 Unafv Material Spending variance: Std Qty*Std price   - Actual material cost 8625*5 - 53730 = $ 10605 Unfav Actual labour hours: 4700 hours Actual rate per hour (37600/4700)= $ 8.00 per hour Labour Rate variance: labour spending -Labour efficiency 3100 -750 = 2350 Unfav Labour rate variance: Actual hours (Std rate-Actual rate) 2350 U = 4700 (Std rate -8.00) = Std rate: $ 7.50 per hour Labour Efficiency = Std rate (Std hours-Actual hours) 750 U = 7.50 (Std hours -4700) Std hours for actual output: 4600 hours Std hour per unitt of output: 4600 /2875 = 1.60 hour 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.