Problem 10-11 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO10-1, LO10-2]
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 $45,240, all of which were used in the production of 2,190 units of product. In addition, 4,500 direct labor-hours were worked on the product during the month. The cost of this labor time was $31,500. The following variances have been computed for the month:
Materials quantity variance $ 1,950 U Labor spending variance $ 3,030 U
Labor efficiency variance $ 780 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 monthâs production.
c. Compute the standard hours allowed per unit of product.
Problem 10-11 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO10-1, LO10-2]
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 $45,240, all of which were used in the production of 2,190 units of product. In addition, 4,500 direct labor-hours were worked on the product during the month. The cost of this labor time was $31,500. The following variances have been computed for the month:
Materials quantity variance | $ | 1,950 | U |
Labor spending variance | $ | 3,030 | U |
Labor efficiency variance | $ | 780 | 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 monthâs production.
c. Compute the standard hours allowed per unit of product.