Problem - Sharp Company manufactures a product for which the following standards have been set:
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Standard Quantity or Hours
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Standard Price or Rate
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Standard Cost
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Direct materials
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3 feet
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$5 per foot
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$15
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Direct labor
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? hours
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? per hour
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?
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During March, the company purchased direct materials at a cost $55,650, all of which were used in the production of 3.200 units of product. In addition, 4,900 hours of direct labor time were worked on the product during the month. The cost of this labor time was $36,750. The following variances have been computed for the month:
Materials quantity variance $ 4,500 U
Labor spending variance $ 1,650 F
Labor efficiency variance $ 800 U
Required:
1. For direct materials:
a. Compute the actual cost per foot for 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.