Company manufactures a product with the following standards: Standard Quantity Standard Price or or Hours 3 feet hours ? ct materials ct labor Rate $5 per foot ? per hour Standard Cost $ 4,350 U $ 15 ? March, the company purchased direct materials for $52,965, all of which were used in the production of 2,920 unit n, 4,500 direct labor-hours were worked on the product during the month. The cost of this labor time was $31,500. ng variances have been computed for the month: rials quantity variance
Company manufactures a product with the following standards: Standard Quantity Standard Price or or Hours 3 feet hours ? ct materials ct labor Rate $5 per foot ? per hour Standard Cost $ 4,350 U $ 15 ? March, the company purchased direct materials for $52,965, all of which were used in the production of 2,920 unit n, 4,500 direct labor-hours were worked on the product during the month. The cost of this labor time was $31,500. ng variances have been computed for the month: rials quantity variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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![Sharp Company manufactures a product with the following standards:
Direct materials
Direct labor
Standard Quantity Standard Price or
or Hours
3 feet
hours
?
Materials quantity variance
Labor spending variance
Labor efficiency variance
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:
Rate
$5 per foot
? per hour
During March, the company purchased direct materials for $52,965, all of which were used in the production of 2,920 units. 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:
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.
Required 1A Required 1B Required 2
Actual cost
$ 4,350 U
$ 3,030 U
$ 780 U
Complete this question by entering your answers in the tabs below.
Standard.
Cost
per foot
For direct materials, compute the actual cost per foot of materials for March.
Note: Round your answer to 2 decimal places.
$ 15
?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F576ed6ba-bff1-478a-8095-5db047a04694%2Fb4510db1-e2a1-494a-9c1e-badc15c6b136%2Fghjnkvo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Sharp Company manufactures a product with the following standards:
Direct materials
Direct labor
Standard Quantity Standard Price or
or Hours
3 feet
hours
?
Materials quantity variance
Labor spending variance
Labor efficiency variance
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:
Rate
$5 per foot
? per hour
During March, the company purchased direct materials for $52,965, all of which were used in the production of 2,920 units. 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:
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.
Required 1A Required 1B Required 2
Actual cost
$ 4,350 U
$ 3,030 U
$ 780 U
Complete this question by entering your answers in the tabs below.
Standard.
Cost
per foot
For direct materials, compute the actual cost per foot of materials for March.
Note: Round your answer to 2 decimal places.
$ 15
?
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