Sharp Company manufactures a product for which the following standards have been set:

Standard Quantity or Hours Standard Price or Rate StandardCost
Direct materials 3 feet $5 per foot $15
Direct labor ? hours ? per hour $ ?
During March, the company purchased direct materials at a cost of $58,050, all of which were used in the production of 3,320 units of product. In addition, 4,900 hours of direct labor time were worked on the product during the month. The cost of this labor time was $39,150. The following variances have been computed for the month:

Materials quantity variance $ 2,700 U
Labor spending variance $ 690 F
Labor efficiency variance $ 640 F
Required:
1. For direct materials:
a. Compute the actual cost per foot for materials for March. (Round your answer to 2 decimal places.)
Actual Cost: ______ per foot
b. Compute the price variance and the spending variance. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance))
Price Variance _ F/U/None (choose one)
Spending Variance ______ F/U/None (choose one)

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cancinodavidq cancinodavidq · Answer 1 · 2019-11-27T02:32:00+01:00

Answer:

You didn´t post the complete information of the exercise, I searched the exercise online and tried to ask the most useful question.

Explanation:

1.a

The actual cost per foot (March) is calculated as follows:

Actua lcost per foot (March)= Direct materials cost / Actual quantity

= $58,050 / 10,500 feet

=$5.53perfoot

Therefore, actual cost per foot for the month of March is $5.53

Working notes:

The actual quantity is calculated as under:

Material quantity variance = [Standard quantity− Actualquantity] × Standard price

$2,700 = [(3,320 units × 3 feet)−−Actual quantity] × $5

Actualquantity = (3,320 units × 3feet) × ($2,700 /$5)

Actualquantity = 10,500feet

(1.b)

The Material price variance is calculated as follows:

Materia lprice variance = (Standard price − Actual price) × Actual quantity

=($5−$5.53)×10,500

=$5,565(U)

Therefore, material price variance is $5,565.

The Material spending variance is calculated as follows:

Materialspendingvariance = Standard cost of Standard quantity

−Standard cost of Actual quantity

=(9,960×$5)−$58,050

=$8,250(U)

Therefore, material spending variance is $8,250.