Stuart Manufacturing Company produces a single product. The following data apply
ID: 2534638 • Letter: S
Question
Stuart 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 Materials price Labor quantity per unit Labor price 1 pound $ 6.40 per pound 2 hours $10.40 per hour During the year, the company made 2,080 units of product. At the end of the year, the following variances had been calculated Materials usage variance 1,408 Favorable Materials price variance 186 Unfavorable Labor usage variance Labor price variance $3,536 Unfavorable $3,150 Favorable Required a. Determine the actual amount of materials used. b. Determine the actual price paid per pound for materials. (Round your answer to 2 decimal places.) c. Determine the actual labor hours used. d. Determine the actual labor price per hour. (Round your answer to 2 decimal places.)Explanation / Answer
SQ = 2080*1 = 2080 SP = 6.40 Material Usage Variance = 1408 Favourable SP*(SQ - AQ) = 1408 6.4*(2080 - AQ) = 1408 2080 - AQ = 1408/6.4 2080 - AQ = 220 AQ = 2080 - 220 Actual Quantity (AQ) = 1860 Material Price Variance = 186 Unfavourable AQ*(SP - AP) = -186 1860 *(6.4 - AP) = -186 6.4 - AP = -186/1860 6.4 - AP = -0.1 AP = 6.4 + 0.1 Actual Price (AP) = 6.5 SH = 2080*2 = 4160 SR = 10.40 Labor Usage Variance = 3536 Unfavourable SR*(SH - AH) = -3536 10.40 *(4160 - AH) = - 3536 (4160 - AH) = - 3536/10.40 (4160 - AH) = - 340 AH = 4160+340 Actual Labor Hours (AH) = 4500 Labor Price Variance = 3150 Favourable AH*(SR - AR) = 3150 4500*(10.40 - AR) = 3150 (10.40 - AR) = 3150/4500 (10.40 - AR) = 0.70 AR = 10.40 - 0.70 Actual Labor Price (AR) = 9.70