Help Save & Exit Sub Saved Check my work Problem 10-11 Direct Materials and Dire
ID: 2436745 • Letter: H
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Help Save & Exit Sub Saved Check my work Problem 10-11 Direct Materials and Direct Labor Variances; Computations from Incomplete Data LO10-1, L010-2] Sharp Company manufactures a product for which the following standards have been set Standard Quantity or Hours 3 feet ? hours Standard Price or Rate Standard Cost $5 per foot 15 Direct materials Direct labor ? per hoyr During March, the company purchased direct materials at a cost of $64,440, all of which were used in the production of 3,500 units of product. In addition, 5,000 direct labor-hours was $47,500. The following variances have been computed for the month: were worked on the product during the month. The cost of this labor time Materials quantity variance Labor spending variance Labor efficiency variance $1,200 u $3,400 U 900 U Required: 1. For direct materials: a. Compute the actual cost per foot of materials for March. 600 PM 7/31/2018 ???-1 ere to searchExplanation / Answer
Std qty for actual output (3500*3): 10500 Std price per feet: 5 Material quantity variance =1200 U Material Qty variance = Std price (Std qty -Actual Qty) 1200 U = 5.00 (10500 - Actual qty) Actual Qty = 10740 Actual cost of material =64440 Actual price per foot = 64440 /10740 = 6.00 Material price variance: Actual qty (Std price -Actual price) 10740 (5-6) = 10740 Unfav Matrial cost variance= Std qty*Std price - Actual material cost 10500*5 - 64440 = 11940 Unfav Actual hours: 5000 hours Actual rate per hour (47500/5000) = 9.50 per hour Labor Spending variance: 3400 U Labor efficiency variance : 900 U Labor rate variance: (3400-900) : 2500 U Labor rate variance : Actual hors (Std rate -Actual rate) 2500 U = 5000 (Std rate - 9.50 ) Std rate = 9.00 Lbour Efficiency variance: Std rate (Std hours - Actual hours) 900 U = 9.00 (Std hours - 5000) Std hours = 4900 hours Std hours allowed per unit of output (4900/3500): 1.40 hours per unit
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