Question
In: Accounting
Problem 9-25 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO9-4, LO9-5] Sharp Company...
Problem 9-25 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO9-4, LO9-5]
Sharp Company manufactures a product for which the following standards 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 cost of $43,335, all of which were used in the production of 2,425 units of product. In addition, 4,000 direct labor-hours were worked on the product during the month. The cost of this labor time was $28,000. The following variances have been computed for the month:
| 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’s production.
c. Compute the standard hours allowed per unit of product.
Solutions
Expert Solution
| Req 1a) | Let the actual quanity be x | ||||||||
| Material Quantity Variance = (Standard quantity - Actual Quantity ) Standard Price | |||||||||
| -3750 = ((2425*3) - x )*5 | |||||||||
| By solving above we get, | |||||||||
| x=8025 | |||||||||
| Actual quanity = 8025 feet | |||||||||
| Cost per fee= Actual cost / actual quanity | |||||||||
| =43335/8025 | |||||||||
| 5.40 | |||||||||
| Req 1 b) | Material Price Variance = (Standard Price - Actual Price ) Actual Quantity | ||||||||
| =(5-5.4 ) * 8025 | |||||||||
| 3,210 | U | ||||||||
| Material spending Variance = Material price variance + quanity variance | |||||||||
| = -3750 + (-3210) | |||||||||
| = 6960 | U | ||||||||
| Req. 2A | Let the standard labor rate be "x" | ||||||||
| Labour Rate Variance = (Standard Rate - Actual Rate) Actual Hrs Worked | |||||||||
| -2780 = (x-(28000/4000))* 4000 | |||||||||
| x=6.305 | |||||||||
| Req 2b | Standard Hours allowed for the months Production; let the standard hours be "x" | ||||||||
| Labour Efficiency Variance = (Standard Hrs. - Actual Hrs) Standard Rate | |||||||||
| Putting values in above formula we get | |||||||||
| -780 = (x-4000)*6.305 | |||||||||
| -780 = 6.305x - 25220 | |||||||||
| 6.305x = 24440 | |||||||||
| x = 3876 | |||||||||
| Req 2c | Standard hours allowed per unit = Total standard hours / No. of units produced | ||||||||
| = 3876/2425 | |||||||||
| 1.60 | |||||||||
ekkarill92 answered 1 year agoRelated Solutions
Problem 9-25 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO9-4, LO9-5] Sharp Company...
Problem 9-25 Direct Materials and Direct Labor Variances;
Computations from Incomplete Data [LO9-4, LO9-5]
Sharp Company manufactures a product for which the following
standards 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 cost
of $56,610, all of which were used in the production of 2,875 units
of product....
Problem 9-25 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO9-4, LO9-5] Sharp Company...
Problem 9-25 Direct Materials and Direct Labor Variances;
Computations from Incomplete Data [LO9-4, LO9-5]
Sharp Company manufactures a product for which the following
standards 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 cost
of $57,510, all of which were used in the production of 3,125 units
of product....
Problem 10-11 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO10-1, LO10-2] Sharp Company...
Problem 10-11 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:
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 cost
of $49,170, all of which were used in the production of 2,750 units
of product....
Problem 10-11 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO10-1, LO10-2] Sharp Company...
Problem 10-11 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:
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 cost
of $45,240, all of which were used in the production of 2,190 units
of product....
Problem 10-11 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO10-1, LO10-2] Sharp Company...
Problem 10-11 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:
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 cost
of $44,100, all of which were used in the production of 2,350 units
of product....
Problem 10-11 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO10-1, LO10-2] Sharp Company...
Problem 10-11 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:
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 cost
of $57,510, all of which were used in the production of 3,125 units
of product....
Exercise 9-13 Direct Materials and Direct Labor Variances [LO9-4, LO9-5] Huron Company produces a commercial cleaning...
Exercise 9-13 Direct Materials and Direct Labor Variances
[LO9-4, LO9-5]
Huron Company produces a commercial cleaning compound known as
Zoom. The direct materials and direct labor standards for one unit
of Zoom are given below:
Standard Quantity or Hours
Standard Price
or Rate
Standard
Cost
Direct materials
4.6
pounds
$
2.50
per pound
$
11.50
Direct labor
0.2
hours
$
18.00
per hour
$
3.60
During the most recent month, the following activity was
recorded:
Twenty thousand pounds of material...
PA9-5 Calculating Direct Materials, Direct Labor, Variable Manufacturing Overhead Variances [LO 9-3, 9-4, 9-5] Bullseye Company...
PA9-5 Calculating
Direct Materials, Direct Labor, Variable Manufacturing Overhead
Variances [LO 9-3, 9-4, 9-5]
Bullseye Company
manufactures dartboards. Its standard cost information
follows:
Standard Quantity
Standard Price (Rate)
Standard Unit Cost
Direct materials
(cork board)
2.5
sq. ft.
$
2.00
per sq. ft.
$
5.00
Direct
labor
1
hrs.
$
14.00
per hr.
14.00
Variable
manufacturing overhead (based on direct labor hours)
1
hrs.
$
0.50
per hr.
0.50
Fixed
manufacturing overhead ($40,000 ÷ 160,000 units)
0.25
Bullseye has the...
Exercise 9-10 Direct Labor and Variable Manufacturing Overhead Variances [LO9-5, LO9-6] Erie Company manufactures a mobile...
Exercise 9-10 Direct Labor and Variable Manufacturing Overhead
Variances [LO9-5, LO9-6]
Erie Company manufactures a mobile fitness device called the
Jogging Mate. The company uses standards to control its costs. The
labor standards that have been set for one Jogging Mate are as
follows:
Standard
Hours
Standard
Rate
per Hour
Standard
Cost
30
minutes
$6.00
$3.00
During August, 10,380 hours of direct labor time were needed to
make 19,200 units of the Jogging Mate. The direct labor cost
totaled $60,204...
E9-4 Calculating Direct Materials and Direct Labor Variances [LO 9-3, 9-4] Suds & Cuts is a...
E9-4 Calculating Direct Materials and Direct Labor Variances [LO
9-3, 9-4]
Suds & Cuts is a local pet grooming shop owned by Collin
Bark. Collin has prepared the following standard cost card for each
dog bath given:
Standard Quantity
Standard Rate
Standard Unit Cost
Shampoo
1.2
oz.
$
0.20
per oz.
$
0.24
Water
10
gal.
$
0.04
per gal.
0.40
Direct labor
0.8
hr.
$
9.00
per hr.
7.20
During the month of July, Collin’s employees gave 300 baths....
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Search the Internet to find (at least 2 websites) related to the general field of malware....
- Consider the following schema: Suppliers(sid, sname, address) Parts(pid, pname, color) Catalog(sid, pid, cost) write the following...
- Singh Development Co. is deciding whether to proceed with Project X. The cost would be $12...
- CS2123 Data Structures - Fall 2019 Assignment 1: Function Runtimes Table Due 9/11/19 by 11:59pm Completing...
- Question 2. Design a 16-1 MUX using any number of lower MUXs, such as 8-1 or...
- . Write a function that takes, as arguments, two objects, value1 and value2. If
- Wii Brothers, a game manufacturer, has a new idea for an adventure game. It can market...
ADVERTISEMENT