Problem - Here is information about standard costs for Rusth Manufacturing:
Standard Cost per Unit
Direct materials (4 metres @ $6 per metre) $24
Direct labour (? hours @ $? per hour) ?
During the current period 3,000 units were produced. Rusth purchased 10,000 metre of material at a cost of $65,000. The direct materials inventory decreased by 1,500 metres during the period. 5,000 hours were used at a cost of $43,000. The direct labour efficiency variance was $2,000 favourable and the combined price and efficiency variances for direct labour were $750 favourable.
a) Determine direct materials price and efficiency variances, are they favorable or unfavorable?
b) Determine the total standard cost of direct materials for the units produced.
c) Determine the standard price per direct labour hour and the standard number of direct labour hours per unit.