Sharp Company manufactures a product for which the following standards have been set Standard Quantity Standard Price or or Hours Rate $5 per foot 7 per hour Standard Cost $15 3 feet 7 Direct materials Direct labor hours 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 0 $ 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.
Sharp Company manufactures a product for which the following standards have been set Standard Quantity Standard Price or or Hours Rate $5 per foot 7 per hour Standard Cost $15 3 feet 7 Direct materials Direct labor hours 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 0 $ 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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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Question
Dd.3.
Transcribed Image Text:Sharp Company manufactures a product for which the following standards have been set
Standard Quantity Standard Price or
or Hours
Standard
Cost
$15
3 feet
7 hours
Direct materials
Direct labor
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:
Materiale 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.
Rate
$5 per foot
7 per hour
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.
Reg 1A
Complete this question by entering your answers in the tabs below.
$ 4,350 U
$ 3,030 0
$ 780 U
Req 18
Price variance
Spending variance
Reg 2
For direct materials, compute the price variance and the spending variance. (Do not round intermediate calculations. Indicate
the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (ie, zero variance).
Input all amounts as positive values.)
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