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Sharp Company manufactures a product for which the following standards have been set: Standard Quantity Standard Price or Hours 3 feet ? hours or Rate $5 per foot ? per hour Standard Cost $15 ? Direct materials Direct labor During March, the company purchased direct materials at a cost of $45,180, all of which were used in the production of 2,290 units of product. In addition, 4,700 hours of direct labor time were worked on the product during the month. The cost of this labor time was $32,900. The following variances have been computed for the month: Materials quantity variance Labor spending variance Labor efficiency variance $3,300 U $3,130 U $ 780 U Required: 1. For direct materials: a. Compute the actual cost per foot for materials for March. (Round your answer to 2 decimal places.) Actual cost per foot b. 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 (i.e., zero variance)) Price variance $ 7,530 U Spending variance $ 10,830U

Sharp Company manufactures a product for which the following standards have been set: Standard Quantity Standard Price or Hours 3 feet ? hours or Rate $5 per foot ? per hour Standard Cost $15 ? Direct materials Direct labor During March, the company purchased direct materials at a cost of $45,180, all of which were used in the production of 2,290 units of product. In addition, 4,700 hours of direct labor time were worked on the product during the month. The cost of this labor time was $32,900. The following variances have been computed for the month: Materials quantity variance Labor spending variance Labor efficiency variance $3,300 U $3,130 U $ 780 U Required: 1. For direct materials: a. Compute the actual cost per foot for materials for March. (Round your answer to 2 decimal places.) Actual cost per foot b. 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 (i.e., zero variance)) Price variance $ 7,530 U Spending variance $ 10,830U

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...
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Sharp Company manufactures a product for which the following standards have been set: Standard Quantity Standard Price or Hours 3 feet ? hours or Rate $5 per foot ? per hour Standard Cost $15 ? Direct materials Direct labor During March, the company purchased direct materials at a cost of $45,180, all of which were used in the production of 2,290 units of product. In addition, 4,700 hours of direct labor time were worked on the product during the month. The cost of this labor time was $32,900. The following variances have been computed for the month: Materials quantity variance Labor spending variance Labor efficiency variance $3,300 U $3,130 U $ 780 U Required: 1. For direct materials: a. Compute the actual cost per foot for materials for March. (Round your answer to 2 decimal places.) Actual cost per foot b. 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 (i.e., zero variance)) Price variance $ 7,530 U Spending variance $ 10,830U
Transcribed Image Text:Sharp Company manufactures a product for which the following standards have been set: Standard Quantity Standard Price or Hours 3 feet ? hours or Rate $5 per foot ? per hour Standard Cost $15 ? Direct materials Direct labor During March, the company purchased direct materials at a cost of $45,180, all of which were used in the production of 2,290 units of product. In addition, 4,700 hours of direct labor time were worked on the product during the month. The cost of this labor time was $32,900. The following variances have been computed for the month: Materials quantity variance Labor spending variance Labor efficiency variance $3,300 U $3,130 U $ 780 U Required: 1. For direct materials: a. Compute the actual cost per foot for materials for March. (Round your answer to 2 decimal places.) Actual cost per foot b. 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 (i.e., zero variance)) Price variance $ 7,530 U Spending variance $ 10,830U
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