EwTW Harne https/tyco.csod.com Saved Homework #6 Help Seve & Exit Check my 2 Sha

Question

EwTW Harne https/tyco.csod.com Saved Homework #6 Help Seve & Exit Check my 2 Sharp Company manufactures a product for which the following standards have been set Standard Quantity Standard Price Standard or Hours 3 feet ? hours or Rate Direct materials Direct labor $11 per foot $33 ? per hour points During March, the company purchased direct materials at a cost of $111 300, all of which were used in the production of 3 product In addition, 4,900 direct labor-hours were worked on the product during the month. The cost of this labor The following variances have been computed for the month: Skipped time was $95,550 eBook Materials quantity variance Labor spending variance Labor efficiency variance S4,400 u $ 450 F 2,080 U Print References 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 Mc Graw Hill K Prev 2 of 5

Explanation / Answer

1. For direct materials:

Standard price (SP)= 11 per foot

standard quantity(SQ) = 3200 units*3= 9600 foot

Actual cost= AP*AQ= 111300

Material quantity variance= -4400

SP* (SQ-AQ)= -4400

11*(9600-AQ)= -4400

AQ= 10000

Actual feet of materials = 10000

Actual price= actual cost/actual quantity= 111300/10000= 11.3

Price variance= AQ*(SP-AP)= 10000*(11-11.3)= -1300= 1300 U

Spending variance= standard cost-Actual cost= 9600*11- 111300= -5700= 5700U

2. For direct labor:

Actual hours worked(AH)= 4900

Actual cost= 95550

Actual rate (AR)= 95550/4900= 19.5

Given labor spending variance= 450

SR= 19.5918

Labor efficiency variance= -2000

19.5918*(SH-4900)= -2000

SH= 4797.9166

a. Standard direct labor hour (SR)= 19.59

b. standard hours allowed= 4797.92

c. Standard hours allowed per unit= 4797.92/ 3200= 1.5 hours per unit

AH*(SR-AR) =450 4900*(SR-19.5) =450

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