Question

Problem 10-11 (Algo) Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO10-1, LO10-2] Sharp Company manufactures a product for which the following standards have been set: During March, the company purchased direct materials at a cost of $45,240, all of which were used in the production of 2,190 units of product. 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: 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. Complete this question by entering your answers in the tabs below. 2a. For direct labor, compute the standard direct labor rate per hour. (Round your answer to the nearest whole dollar.) 2 b. For direct labor, compute the standard hours allowed for the month's production. (Do not round your intermediate value.) 2c. For direct labor, compute the standard hours allowed per unit of product. (Round your answer to 1 decimal place.)

Answer 1

To compute the actual cost per foot of materials for March, divide the total cost of materials purchased by the number of feet purchased. To compute the standard direct labor rate per hour, divide the cost of labor by the number of labor-hours worked. To compute the standard hours allowed per unit of product, divide the standard hours allowed for the month's production by the number of units of product.

Step-by-step explanation:

To compute the actual cost per foot of materials for March, you need to divide the total cost of materials purchased by the number of feet purchased. In this case, the cost of materials is $45,240 and the number of units of product is 2,190. Therefore, the actual cost per foot of materials is $20.68.

To compute the price variance, you need to multiply the difference between the actual cost per foot of materials and the standard cost per foot by the number of feet purchased. The standard cost per foot is not provided in the question, so it cannot be computed. Therefore, the price variance cannot be calculated without this information.

The spending variance is the difference between the actual cost and the standard cost. Again, the standard cost is not provided in the question, so it cannot be calculated. Therefore, the spending variance cannot be computed without this information.

To compute the standard direct labor rate per hour, divide the cost of labor by the number of labor-hours worked. In this case, the cost of labor is $31,500 and the number of labor-hours worked is 4,500. Therefore, the standard direct labor rate per hour is $7.

To compute the standard hours allowed for the month's production, multiply the standard direct labor rate per hour by the number of hours worked. In this case, the standard direct labor rate per hour is $7 and the number of hours worked is 4,500. Therefore, the standard hours allowed for the month's production is 31,500 hours.

To compute the standard hours allowed per unit of product, divide the standard hours allowed for the month's production by the number of units of product. In this case, the standard hours allowed for the month's production is 31,500 hours and the number of units of product is 2,190. Therefore, the standard hours allowed per unit of product is 14.4 hours.