Question

In: Accounting

Rundle Manufacturing Company produces a single product. The following data apply to the standard cost of...

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.)

Solutions

Expert Solution

(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


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