Sharp Company manufactures a product for which the following standards have been set: Standard Quantity or Hours
Question:
Sharp Company manufactures a product for which the following standards have been set:
| Standard Quantity | Standard Price | Standard | |||||
Direct materials | 3 | feet | $ | 11 | per foot | $ | 33 | |
Direct labor | ? | hours | | ? | per hour | | ? | |
|
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:
| | | |
Materials quantity variance | $ | 4,400 | U |
Labor spending variance | $ | 450 | F |
Labor efficiency variance | $ | 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.Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer