Question

Problem 9-25 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO9-4 し09-5] Sharp Company manufactures a product for which the following standards have been set: Standard Quantity Standard Price Standard or Hours 3 feet ? hours or Rate $5 per foot ? per hour Cost Direct materials Direct labor s 15 During March, the company purchased direct materials at a cost of $52,965, all of which were used in the production of 2,920 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 Labor spending variance Labor efficiency variance $ 4,350 U 3,030 U $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 month's production c. Compute the standard hours allowed per unit of product. Complete this question by entering your answers in the tabs below Req 1A Req 1B Req 2 For direct materials, compute the actual cost per foot of materials for March. (Round your answer to 2 decimal places.) ual cost per foot Req 1A Req 1B >

Answer 1

1 For direct materials: a) Compute the actual cost per foot for materials for March Materials quantity variance = $4,350 = $4,350 $4,350 $48.150 Actual Quantity = Standard Price * (Actual Quantity - Standard Quantity) $5 per foot * [Actual Quantity - (2.920 units * 3 feet per unit)] $5 per foot * (Actual Quantity - 8.760 feet) ($5 per foot * Actual Quantity) - $43,800 $5 per foot * Actual Quantity $48,150 / $5 per foot 9.630 feet Actual cost per foot $52,965 / 9,630 $5.50 b) Compute the price variance and the spending variance. Price Variance Spending Variance $4.815 U $9,165 U workings: Materials price variance = Actual Quantity * (Actual price - Standard price) 9,630 feet * ($5.50 per foot - $5.00 per foot) $4.815 Unfavorable Total variance for materials: Materials price variance = Materials quantity variance = Spending (Total) Variance $4.815 U $4,350 U $9.165 U 2 For direct labor: a) Compute the standard direct labor rate per hour: Labor rate variance = $2,250 $2,250 $2.250 Standard Rate = Actual Hour * (Actual Rate - Standard Rate) 4,500 hours * [($31.500 / 4,500 hours) - Standard Rate] 4,500 hours * (S7 per hour - Standard Rate) $31,500 - (4,500 hours * Standard Rate) $29,250 / 4,500 hours $6.50 per hour workings: Labor spending (total) variance = Less: Labor efficiency variance = Labor rate variance = $3,030 U $780 U $2.250 U b) Compute the standard hours allowed for the month's production. Labor efficiency variance = $780 = $780 = Standard Hour = Standard Rate * (Actual Hour - Standard Hour) $6.50 per hour * (4.500 hours - Standard Hour) $29,250 - ($6.50 per hour * Standard hour) $28,470 / $6.50 per hour 4,380 hours c) Compute the standard hours allowed per unit of product. Standard Hour = Production = 4,380 hours 2.920 Units standard hours allowed per unit = 4,380/2,920 1.5 hour per unit