Question

Assignment Print View 11/11/19, 1:51 PM Award: 80.00 points Sharp Company manufactures a product for which the following standards have been set Standard Quantity Standard Price Standard or Hours or Rate Cost Direct materials 3 feet $11 per foot Direct labor ? hours ? per hour S33 During March, the company purchased direct materials at a cost of $111,300, all of which were used in the production of 3,200 units of product. In addition, 4.900 direct labor-hours were worked on the product during the month. The cost of this labor time was 595,550. The following variances have been computed for the month: Materials quantity variance Labor spending variance Lahor efficiency variance $ $ S 4.400 U 450 F 2,000 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 ralu per hour b. Compute the standard hours allowed for the month's production c. Compute the standard hours allowed per unit of product. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Reg 2 For direct materials, compute the actual cost per foot of materials for March. (Round your answer to 2 decimal places.) Actual cost per foot References Workshoot Learning Objective: 10-01 Compute the direct materials price and quantity variances and explain their significance https://ezto.mheducation.com/hmtpx?todowc15SinglePrintView singl...252711767430405&role-studentapid-31101339_3597918873 1111703018 Page 1 of 2

Answer 1

MATERIAL

Material Quantity Variance = (Standard Quantity per unit - Actual Quantity per unit) * Standard Price per unit * No of Units produced

-4400 = (3 - Actual Quantity Per Unit) * 3 * 3200

Actual Quantity per Unit = [4400 / (3200*3)] + 3

Actual Quantity per unit = 3.125 feet

(a) Actual Cost per foot of Material = Total Actual cost of Material / (No. of Units Produced * Actual Quantity Per Unit)

= 111300 / (3200 * 3.125)

= $11.13 per foot

(b) Price Variance / Spending Variance = (Standard Price per foot- Actual Price per foot) * Actual Quantity Consumed

= (11 - 11.13) 3.125 * 3200

= -1300 ie. $1,300 Unfavorable

LABOR

Actual Hours = 4900 Hours

Actual Labor Cost = $95,550

Actual Rate per Hour = Actual Labor Cost / Actual Hours

= $95,550 / 4900

= $19.5 per hour

(a) Labor Spending Variance = (Standard Rate per Hour - Actual Rate per Hour) * Actual Hours

450 = (Standard Rate Per Hour - 19.5) * 4900

Standard Rate Per Hour = (450 / 4900) + 19.5

= $19.59 per hour

(b) Labor Efficiency Variance = (Standard Labor Hours - Actual Labor Hours) * Standard Labor Rate per Hour

-2000 = (Standard Labor Hours - 4900) * 19.59

Standard Labor Hours = (-2000 / 19.59) + 4900

= 4798 Hours approx

(c) Standard Hours Per unit = Total Standard Hours / No of Units produced

= 4798 / 3200

= 1.5 Hours per unit approx.