Check my work 2 Sharp Company manufactures a product for whi

Check my work 2 Sharp Company manufactures a product for which the following standards have been set Quantity Standard Price Cost feet hours $5 per foot 15 points Direet labor 2per hour During March, the company purchased direct materials at a cost of $45,375, all of which were used in the production of 2,350 units of product. In addition, 4,800 direct labor-hours were worked on the product during the month. The cost of this labor time was $50,400 The following variances have been computed for the month: eBook Matersals quantity variance Labor spending variance Labor effieLency variance 2,250 3,400 1,000 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: 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

Solution

1(a) MQV = Standard Price ( Standard Quantity- Actual Quantity) -$2,250 = $5((3X2350)-AQ) -$2,250 = $5(7050-AQ) -$450 = 7050-AQ AQ = 7500 Actual Cost per Foot = Actual Price /Actual Quantity = $45375/7500 = $6.05 1((b) MPV = (Standard Price- Actual price)*Actual Quantity = ($5-$6.05)*7500 = 7875 Unfavourable Mat. Spending Var. = MQV+MPV = -2250+7875 = $5625 Fav 2(a) Labour Sepnding Var. = LRV+ LEV ($3,400) = LRV+($1000) LRV = ($2,400) LRV = (Stand Rate-Actual Rate)* Actual Hour ($2,400) = (SR X 4800 Hour)- $50400 $48,000 = SRX 4800 SR or Standard Rate/Hour = $10/Hour 2(b)LEV = (Stand. Hour- Actual Hour)* SR -$1000 = (SH-4800)$10 (-$1000+$48000) = 10SH SH = 4700 Hour