Sharp Company manufactures a product for which the followingstandards have been set:
| Standard Quantity
or Hours | Standard Price
or Rate | Standard
Cost |
| Direct materials | 3 | feet | $ | 5 | per foot | $ | 15 | |
| Direct labor | ? | hours | | ? | per hour | | ? | |
|
During March, the company purchased direct materials at a costof $43,335, all of which were used in the production of 2,425 unitsof product. In addition, 4,000 direct labor-hours were worked onthe product during the month. The cost of this labor time was$28,000. The following variances have been computed for themonth:
| | | |
| Materials quantity variance | $ | 3,750 | U |
| Labor spending variance | $ | 2,780 | U |
| Labor efficiency variance | $ | 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:
a. Compute the standard direct labor rate per hour.
b. Compute the standard hours allowed for the month’sproduction.
c. Compute the standard hours allowed per unit of product.
