In all problems involving variances, use “F” and “U” to indicate favorable and unfavorab...

In all problems involving variances, use “F” and “U” to indicate favorable and unfavorable variances, respectively.

Analyses; review of chapter

On May 1, Sparta Inc. began the manufacture of a new mechanical device known as Alex. The company installed a standard cost system in accounting for manufacturing costs. The standard costs for a unit of Alex follow:

The amount shown above for the materials price variance is applicable to raw materials purchased during May.

Required:

Compute each of the following items for Sparta for May. Show computations in good form.

1. Standard quantity of raw materials allowed (in pounds) for actual production.

2. Actual quantity of raw materials used (in pounds). (Hint: Be sure to consider the materials quantity variance.)

3. Standard direct labor hours allowed.

4. Actual direct labor hours worked.

5. Actual direct labor rate. (Hint: Be sure to consider the direct labor rate variance.)

6. Actual total overhead.