Sharp Company manufactures a product for which the followingstandards have been set:Standard Quantityor...Sharp Company...

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Accounting

Sharp Company manufactures a product for which the followingstandards have been set:
Standard Quantity
or Hours Standard Price
or Rate Standard
Cost
Directmaterials 3 feet $ 5 per foot $ 15
Direct labor ? hours ? per hour ?
During March, the company purchased direct materials at a costof $45,240, all of which were used in the production of 2,400 unitsof product. In addition, 4,900 direct labor-hours were worked onthe product during the month. The cost of this labor time was$39,200. The following variances have been computed for themonth:
Materials quantityvariance $ 3,000 U
Labor spending variance $ 3,200
U
Labor efficiency variance $ 750
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’sproduction.
c. Compute the standard hours allowed per unit of product.

Answer & Explanation Solved by verified expert

3.8 Ratings (668 Votes)

Solution 1 For direct materials a Computation of the actual cost per foot of materials for March Materials usagequantity variance Actual Quantity Used Standard QuantityStandard Price 3000 Actual Quantity Used 324005 Actual Quantity Used 30005 7200 6007200 Actual Quantity Used 7800 Actual Quantity Purchased all is being used than Actual See Answer

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Transcribed Image Text

In: AccountingSharp Company manufactures a product for which the followingstandards have been set:Standard Quantityor...Sharp Company manufactures a product for which the followingstandards have been set:Standard Quantityor HoursStandard Priceor RateStandardCostDirectmaterials3feet$5per foot$15Direct labor?hours?per hour?During March, the company purchased direct materials at a costof $45,240, all of which were used in the production of 2,400 unitsof product. In addition, 4,900 direct labor-hours were worked onthe product during the month. The cost of this labor time was$39,200. The following variances have been computed for themonth:Materials quantityvariance$3,000ULabor spending variance$3,200ULabor efficiency variance$750URequired: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’sproduction.c. Compute the standard hours allowed per unit of product.

	Standard Quantity or Hours		Standard Price or Rate			Standard Cost
Directmaterials	3	feet	$	5	per foot	$	15
Direct labor	?	hours		?	per hour		?


Materials quantityvariance	$	3,000	U
Labor spending variance	$	3,200	U
Labor efficiency variance	$	750	U