Sharp Company manufactures a product for which the following standards have been set: Standard Cost Standard Quantity Standard Price or or Hours Rate 3 feet $5 per foot hours ? per hour $ 15 ? ? Direct materials Direct labor During March, the company purchased direct materials at a cost of $54,630, all of which were used in the production of 2,875 units of product. In addition, 4,700 direct labor-hours were worked on the product during the month. The cost of this labor time was $47,000. The following variances have been computed for the month: 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: 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 $ 2,400 U $ 3,300 U $ 950 U Req 1B Req 2 2a. For direct labor, compute the standard direct labor rate per hour. (Round your answer to the nearest whole dollar.) 2b. For direct labor, compute the standard hours allowed for the month's production. (Do not round your intermediate value.) 2c. For direct labor, compute the standard hours allowed per unit of product. (Round your answer to 1 decimal place.) 2a. Standard direct labor rate per hour 2b. Standard hours allowed for the month's production 20 Standard boure allowed. por unit of product $ 10 18 O
Sharp Company manufactures a product for which the following standards have been set: Standard Cost Standard Quantity Standard Price or or Hours Rate 3 feet $5 per foot hours ? per hour $ 15 ? ? Direct materials Direct labor During March, the company purchased direct materials at a cost of $54,630, all of which were used in the production of 2,875 units of product. In addition, 4,700 direct labor-hours were worked on the product during the month. The cost of this labor time was $47,000. The following variances have been computed for the month: 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: 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 $ 2,400 U $ 3,300 U $ 950 U Req 1B Req 2 2a. For direct labor, compute the standard direct labor rate per hour. (Round your answer to the nearest whole dollar.) 2b. For direct labor, compute the standard hours allowed for the month's production. (Do not round your intermediate value.) 2c. For direct labor, compute the standard hours allowed per unit of product. (Round your answer to 1 decimal place.) 2a. Standard direct labor rate per hour 2b. Standard hours allowed for the month's production 20 Standard boure allowed. por unit of product $ 10 18 O
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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Transcribed Image Text:Sharp Company manufactures a product for which the following standards have been set:
Standard
Standard Quantity Standard Price or
or Hours
Rate
Cost
$15
3 feet
hours
$5 per foot
? per hour
?
?
Direct materials
Direct labor
During March, the company purchased direct materials at a cost of $54,630, all of which were used in the production of 2,875 units of
product. In addition, 4,700 direct labor-hours were worked on the product during the month. The cost of this labor time was $47,000.
The following variances have been computed for the month:
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:
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.
$ 2,400 U
$ 3,300 U
$ 950 U
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
Req 2
2a. For direct labor, compute the standard direct labor rate per hour. (Round your answer to the nearest whole dollar.)
2b. For direct labor, compute the standard hours allowed for the month's production. (Do not round your intermediate value.)
2c. For direct labor, compute the standard hours allowed per unit of product. (Round your answer to 1 decimal place.)
2a. Standard direct labor rate per hour
2b. Standard hours allowed for the month's production
2c. Standard hours allowed per unit of product
$
10
18
0.8
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