Question
Sharp Company manufactures a product for which the following standards have been set: Direct materials Direct labor Standard Quantity or Hours 3 feet Standard
Sharp Company manufactures a product for which the following standards have been set: Direct materials Direct labor Standard Quantity or Hours 3 feet Standard Price or Rate Standard Cost ? hours $ 5 per foot ? per hour $ 15 ? During March, the company purchased direct materials at a cost of $64,440, all of which were used in the production of 3,500 units of product. In addition, 5,000 direct labor-hours were worked on the product during the month. The cost of this labor time was $47,500. The following variances have been computed for the month: Materials quantity variance Labor spending variance Labor efficiency variance $ 1,200 U $ 3,400 U $ 900 U
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