Sharp Company manufactures a product with the following standards: Standard Quantity Standard Price or or Hours Rate 3 feet hours $5 per foot ? per hour ? Direct materials Direct labor 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: During March, the company purchased direct materials for $45,240, all of which were used in the production of 2,190 units. 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: $ 1,950 U $ 3,030 U $780 U Standard Cost 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. $ 15 ?
Sharp Company manufactures a product with the following standards: Standard Quantity Standard Price or or Hours Rate 3 feet hours $5 per foot ? per hour ? Direct materials Direct labor 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: During March, the company purchased direct materials for $45,240, all of which were used in the production of 2,190 units. 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: $ 1,950 U $ 3,030 U $780 U Standard Cost 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. $ 15 ?
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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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 with the following standards:
Standard Quantity Standard Price or
or Hours
Rate
$5 per foot
3 feet
hours
?
? per hour
Direct materials
Direct labor
During March, the company purchased direct materials for $45,240, all of which were used in the production of 2,190 units. 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
$1,950 U
$ 3,030 U
$ 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:
Standard
Cost
$ 15
?
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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