In: Accounting
Rundle Manufacturing Company produces a single product. The following data apply to the standard cost of materials and labor associated with making the product:
Materials quantity per unit | 1 | pound | |
Materials price | $ | 6.10 | per pound |
Labor quantity per unit | 2 | hours | |
Labor price | $ | 10.10 | per hour |
During the year, the company made 2,020 units of product. At the end of the year, the following variances had been calculated.
Materials usage variance | $ | 1,159 | Favorable |
Materials price variance | $ | 183 | Unfavorable |
Labor usage variance | $ | 3,131 | Unfavorable |
Labor price variance | $ | 3,045 | Favorable |
Required
Determine the actual amount of materials used.
Determine the actual price paid per pound for materials. (Round your answer to 2 decimal places.)
Determine the actual labor hours used.
Determine the actual labor price per hour. (Round your answer to 2 decimal places.)
(1) Actual Amt of Material Used:-
Material Usage Variance = (Std Qty – Actual Qty) * SR
(2020 – AQ) * 6.10 = 1159(F)
AQ = 1830 units
(2) Actual Price paid per pound for material :-
Material Price Variance = (SR – AR) * AQ
183(U) = (6.10 – AR) * 1830
183(U) = 11163 – 1830AQ
AR = 6.20
(3) Actual Labour Hrs Used :-
Labour Usage Variance = (Std Hrs – Actual Hrs) * SR
Std Hrs = Actual output * Std hr per unit
= 2020*2 = 4040
3131(U) = (4040 – Actual Hrs) * 10.10
3131(U) = 40804 – 10.10 Actual hrs
Actual Hrs = 4350 Hrs
(4) Actual Labour Price per hour :-
Labour Price Variance = (SR – AR) * Actual Hrs
3045(F) = (10.10 – AR) * 4350
3045 (F) = 43935 – 4350 AR
AR = 9.40