Question

Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,500 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $11.00. Normal capacity was 49,500 direct labor hours. During the year, 130,000 pounds of raw materials were purchased at $0.90 per pound. All materials purchased were used during the year.

(a)

               

If the materials price variance was $1,300 favorable, what was the standard materials price per pound? (Round answer to 2 decimal places, e.g. 2.75.)

Standard materials price per pound                        

0.91

(b)

               

If the materials quantity variance was $18,200 unfavorable, what was the standard materials quantity per unit? (Round answer to 1 decimal place, e.g. 1.5.)

Standard materials quantity per unit       

4.0

(c)

What were the standard hours allowed for the units produced?

Standard hours allowed                44,000

(d) If the labor quantity variance was $4,400 unfavorable, what were the actual direct labor hours worked?

Actual hours worked     

Answer 1

Answer to Part 1
Material Price Variance
AQ*(SP-AP)	1300
130000*(SP - 0.90)	1300
(SP - 0.90)	1300/130000
(SP - 0.90)	0.01
SP	0.01+0.90
Standard Price (SP)	0.91

Answer to Part 2
Material Quantity Variance
SP*(SQ-AQ)	-18200
0.91*(SQ-130000)	-18200
(SQ-130000)	-18200/0.91
(SQ-130000)	-20000
SQ	-20000+130000
Standard Quantity (SQ)	110000
Actual Output	27500
standard materials quantity per unit (110000/27500)	4

Answer to Part 3
What were the standard hours allowed for the units produced?
Actual number of units	27500
Standard hours of direct labor per unit	1.6
Standard hours allowed for the units produced (27500*1.6)	44000

Answer to Part 4
Labor quantity variance	-4400
Standard Rate*(Standard Hours - Actual Hours)	-4400
11*(44000 - Actual Hours)	-4400
(44000 - Actual Hours)	-4400/11
(44000 - Actual Hours)	-400
- Actual Hours	-400-44000
- Actual Hours	-44400
Actual Hours	44400