Question

Check my work Computations from Incomplete Data (LO10-1, LO10-2) Sharp Company manufactures a product for which the following standards have been set: points Skipped Standard Quantity Standard Price Standard or Hours or Rate Cost 3 feet $11 per foot $33 7 hours ? per hour ? Direct materials Direct labor eBook 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 $95,550. The following variances have been computed for the month: Print References Materials quantity variance Labor spending variance Labor efficiency variance $ 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 rate 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. Reg 1A Reg 1B Reg 2 For direct materials, compute the actual cost per foot of materials for March. (Round your an Actual cost per foot

Answer 1

Answer 1-a:

Standard quantity allowed = Actual production * Standard quantity per unit
Standard quantity allowed = 3,200 * 3
Standard quantity allowed = 9,600 feet

Materials quantity variance = Standard price per foot * (Actual quantity used - Standard quantity allowed)
$4,400 = $11.00 * (Actual quantity used - 9,600)
400 = Actual quantity used - 9,600
Actual quantity used = 10,000 foot

Actual cost per foot = Actual materials cost / Actual quantity used
Actual cost per foot = $111,300 / 10,000
Actual cost per foot = $11.13

Answer 1-b:

Materials price variance = Actual quantity used * (Actual cost per foot - Standard price per foot)
Materials price variance = 10,000 * ($11.13 - $11.00)
Materials price variance = $1,300 Unfavorable

Materials spending variance = Materials price variance + Materials quantity variance
Materials spending variance = $4,400 Unfavorable + $1,300 Unfavorable
Materials spending variance = $5,700 Unfavorable

Answer 2-a:

Labor spending variance = Labor rate variance + Labor efficiency variance
$450 Favorable = Labor rate variance + $2,000 Unfavorable
Labor rate variance = $2,450 Favorable

Labor rate variance = Actual labor cost - Actual labor hours * Standard labor rate per hour
-$2,450 = $95,550 - 4,900 * Standard labor rate per hour
4,900 * Standard labor rate per hour = $98,000
Standard labor rate per hour = $20.00

Answer 2-b:

Labor efficiency variance = Standard labor rate per hour * (Actual labor hours - Standard labor hours allowed)
$2,000 = $20 * (4,900 - Standard labor hours allowed)
100 = 4,900 - Standard labor hours allowed
Standard labor hours allowed = 4,800

Answer 2-c:

Standard labor hours allowed per unit = Standard labor hours allowed / Actual production
Standard labor hours allowed per unit = 4,800 / 3,200
Standard labor hours allowed per unit = 1.50