During the past month the company purchased 6800 pounds of

Reference no: EM13576964

Topaz Company makes one product and has set the following standards for materials and labor:

	Direct Materials	Direct Labor
Standard quantity or hours per unit	? pounds		2.50	hours
Standard price or rate	? per pound	$	8.50	per hour
Standard cost per unit	?	$	21.25

During the past month, the company purchased 6,800 pounds of direct materials at a cost of $19,040. All of this material was used in the production of 1,200 units of product. Direct labor cost totaled $22,500 for the month. The following variances have been computed:


Materials quantity variance	$	1,220	U
Total materials spending variance	$	480	F
Labor efficiency variance	$	4,250	F

Required:

1.	For direct materials:

a.	Compute the standard price per pound for materials. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Standard price

b.	Compute the standard quantity allowed for materials for the month's production. (Round your intermediate answer to 2 decimal places.)

Standard quantity

pounds

c.	Compute the standard quantity of materials allowed per unit of product. (Round your answer to 2 decimal places.)

Standard quantity

pounds per unit

2.	For direct labor:

a.	Compute the actual direct labor cost per hour for the month. (Round your answer to 2 decimal places.)

Actual direct labor cost per hour

Compute the labor rate variance. (Do not round intermediate calculations. Round your answer to the nearest dollar amount. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Labor rate variance

$ (Click to select)UNoneF

Reference no: EM13576964

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