Sharp Company manufactures a product for which the following standards have been set:     Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 3 feet $ 5 per foot $ 15   Direct labor ? hours   ? per hour   ?       During March, the company purchased direct materials at a cost of $43,335, all of which were used in the production of 2,425 units of product. In addition, 4,000 direct labor-hours were worked on the product during the month. The cost of this labor time was $28,000. The following variances have been computed for the month:           Materials quantity variance $ 3,750 U Labor spending variance $ 2,780 U Labor efficiency variance $ 780 U

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Sharp Company manufactures a product for which the following standards have been set:

 

  Standard Quantity
or Hours
Standard Price
or Rate
Standard
Cost
Direct materials 3 feet $ 5 per foot $ 15  
Direct labor ? hours   ? per hour   ?  
 

 

During March, the company purchased direct materials at a cost of $43,335, all of which were used in the production of 2,425 units of product. In addition, 4,000 direct labor-hours were worked on the product during the month. The cost of this labor time was $28,000. The following variances have been computed for the month:

 

       
Materials quantity variance $ 3,750 U
Labor spending variance $ 2,780

U

Labor efficiency variance $ 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.

 

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