Question

You have been given the following information about the production of Usher Co., and are asked to provide the plant manager with information for a meeting with the vice president of operations. Direct materials (8 pounds at $4 per pound) Direct labor (0.70 hours at $10) Variable overhead (0.70 hours at $5 per hour) Fixed overhead (0.70 hours at $7 per hour) Standard Cost Card $32.00 7.00 3.50 4.90 $47.40 The following is a variance report for the most recent period of operations. Costs Direct materials Direct labor Variances Total Standard Cost Price Quantity $409,600 $5,240 F $9,600 U 89,600 3,896 U 7,800 U How many units were produced during the period? Number of units e Textbook and Media How many pounds of raw materials were purchased and used during the period? Raw material pounds

Answer 1

How many units were produced during the period? Number of units = Total standard cost/Direct materials standard cost per unit Number of units = $409,600 / $32 = 12,800 units How many pounds of raw material were purchased and used during the period? Actual Quantity=(Standard Materials Cost + Unfavorable Quantity Variance) /Direct materials standard cost per lb AQ =($409,600 + $9,600)/$4 = 104,800 pounds What was the actual cost per pound of raw materials? Actual Price =(Actual Quantity x Standard Price) - Favorable Price Variance/Actual Quantity AP=(104,800 pounds x $4) - $5,240 /104,800 pounds AP=($419,200 - $5,240)/104,800 = $3.95 How many actual direct labor hours were worked during the period? Actual Hours = (Standard Direct Labor Cost+Unfavorable Quantity Variance) Standard Labor Rate AH=($89,600+$7,800) $10 = 9,740 hours What was the actual rate paid per direct labor hour? Actual Rate =(Actual Hours x Standard Rate) + Unfavorable Rate Variance/Actual Hours AR=(9.740 x $10) +$3.896/9,740 AR = ($97,400 +$3,896)/9,740 = $10.40 per direct labor hour