Ponte Company Produced 2,500 Widgets During December Using 4,000 Units

question 162

Essay

Ponte Company produced 2,500 widgets during December using 4,000 units of materials at a cost of $5.00 each. It also used 5,000 direct labour hours at a rate of $7.00 per hour. Its direct materials standard is 2 units per widget. Its direct labour standard is 2.5 hours per widget.
Its materials price variance was a favourable $8,000, and its labour rate variance was an unfavourable $1,000.
Required:
A. Calculate the standard materials price per unit.
B. Calculate the standard labour rate.
C. Determine the materials usage variance and whether it is favourable or unfavourable.
D. Determine the labour efficiency variance and whether it is favourable or unfavourable.

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Definitions:

Work Schedules

Refers to the planned hours and days that employees are expected to work, which can vary from standard 9-5 hours to shifts, flexible hours, and part-time or full-time arrangements.

Job Analysis

The method of researching and gathering data on the requirements and content of positions, along with the environment in which these positions are executed.

Job Design

The process of organizing tasks, duties, and responsibilities into a productive work unit to enhance job satisfaction and performance.

Compressed Workweek

A work schedule that allows employees to work full-time hours in fewer days than a traditional workweek.