Chapter 9, Problem 25P

Direct Materials and Direct Labor Variances: Computations from Incomplete Data
Sharp Company manufactures a product for which the following standards have been set:

During March, the company purchased direct materials at a cost of Sit 1.300, all of which were used in the production of 3.200 units of product. In addition. 4.900 direct labor-hours were worked on the product during the month. The cost of this labor time was S95,550. The following variances have been computed for the mouth:

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.
(Hint: In completing the problem. it may be helpful to move from known to unknown data by the columnar format shown in Exhibits 9−11 and 9−12.)