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Topaz Company makes one product and has set the following standards for materials and labor:...

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Accounting

Topaz Company makes one product and has set the following standards for materials and labor:

Direct Materials Direct Labor

Standard quantity or hours per unit ? pounds 2.60 hours

Standard price or rate ? per pound $5.00 per hour

Standard cost per unit ? $13.00

During the past month, the company purchased 7,900 pounds of direct materials at a cost of $17,380. All of this material was used in the production of 1,500 units of product. Direct labor cost totaled $18,700 for the month. The following variances have been computed:

Materials quantity variance $1,040 U Total materials spending variance $2,120 F Labor efficiency variance $2,500 F

Required:
1. For direct materials:

a. Compute the standard price per pound for materials.

b. Compute the standard quantity allowed for materials for the months production.

c. Compute the standard quantity of materials allowed per unit of product.

2. For direct labor:

a. Compute the actual direct labor cost per hour for the month.

b. Compute the labor rate variance.

Here's my work for 1a: (17,380+2120)/7900 = 2.47 per pound. This isn't correct; what am I doing wrong?

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