Question
Sharp Company manufactures a product for which the following standards have been set: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials
Sharp Company manufactures a product for which the following standards have been set:
Standard Quantity or Hours | Standard Price or Rate | Standard Cost | ||||||
Direct materials | 3 | feet | $ | 5 | per foot | $ | 15 | |
Direct labor | ? | hours | ? | per hour | ? | |||
During March, the company purchased direct materials at a cost of $54,630, all of which were used in the production of 2,875 units of product. In addition, 4,700 direct labor-hours were worked on the product during the month. The cost of this labor time was $47,000. The following variances have been computed for the month:
Materials quantity variance | $ | 2,400 | U |
Labor spending variance | $ | 3,300 | U |
Labor efficiency variance | $ | 950 | 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 months production.
c. Compute the standard hours allowed per unit of product.
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