Sharp Company manufactures a product for which the following stondards have been

Question

Sharp Company manufactures a product for which the following stondards have been set Standard Quantity Standard Price Standard or Hours 3 feet ? hours Cost s 15 or Rate Direct naterials Direct labor 55 per foot 2 per hour 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 direct labor-hours 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 Naterials quantity variance Labor spending variance Labor efficiency variance s 1,500 u $ 3,200 U S 880 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. o. 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. omplete this question by entering your answers in the tabs belo Req 1A Req 18 Req 2 For direct materials, compute the actual cost per foot of materials for March. (Round your answer to 2 decimal places.) Per foot

Explanation / Answer

Req 1-a: Actual material cosst: $ 44,100 Actual output: 2350 units Actual material cost per unit: 44100 /2350 = $ 18.77 per unit Req 1-b: Std prpice per foot: $ 5 per foot Std quantity allowed for actual output (2350*3): 7050 foot Material Quantity variance: Std price (Std qty-Actual qty) 1500 U = 5 ( 7050 - Actual Quantity) Actual Quantty: 7350 foot Actual price per foot (44100/7350): $ 6 per foot Material price variance: Actual quantiity (Std price-Actual price) 7350 (5- 6) = 7350 U Std material cost for actual output: 7050 foot @5 = $ 35250 Material Spending variance: Std material cost-Actual material cost 35250 - 44100 = $ 8850 U Req 2 Actual Labour cost: $ 40800 Actual labour hours: 4800 Actual rate per hour: 40800/4800 = $ 8.50 per hour Labour spending variance: 3200 U Labour efficiency variance: 800 U Labour rate variance:(Spending-Efficiency): 2400 U Labour rate variance: Actual hours (Std rate-Actual rate) 2400 U = 4800 (Std rate- 8.50 ) Std rate per hour: $ 8.00 per hour labour Efficiency variance: Std rate (Std hours-Actual hours) 800 U = 8.00 (Std hours - 4800 hours) Std hours: 4700 hours Std hours for actual output: 4700 hours Std hours per unit of output: (4700/2350): 2.00 hours per unit

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