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 $45,180, all of which were used in the production of 2,290 units of product. In addition, 4,700 hours of direct labor time were worked on the product during the month. The cost of this labor time was $32,900. The following variances have been computed for the month: Materials quantity variance Labor spending variance Labor efficiency variance $3,300 U $3,130 U $ 780 U Required 1. For direct materials a. Compute the actual cost per foot for materials for March. (Round your answer to 2 decimal places.) ctual cost per foot

Explanation / Answer

Material Quantity variance=AR*(SQ-AQ) -3300=45180/2290*(3*2290-AQ) 138840=45180/2290AQ AQ=7037 AR=45180/2290=19.73/3=6.57 per foot Price Variance=SQ*(SR-AR) =2290*3*(15-19.73)        -32,495 (U) -3130=SH*(SR-AR) -780=AR*(SH-AH) -3130=SH*(SR-32900/4700) -3130=SH*(SR-7) -780=7*(SH-4700) -780=7Sh-32900 7SH=29770 SH=4589 Put the value of SH -3130=4589*SR-4589*7 28993/4589=SR SR=6.33 Spending Variance=SR*(SH-AH) =6.33*(29770/7-4700)        -702.63 (U) Dierect labour per hr= 6.33

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