Solving for Materials and Labor

question 63

Essay

Solving for materials and labor.Howard Company makes screen doors.Under the flexible budget,when the firm uses 85,000 direct labor hours,budgeted variable overhead is $85,000,whereas budgeted direct labor costs are $573,750.The company applies variable overhead to production units on the basis of direct labor hours.All data apply to the month of February.The following are some of the variances for February (F denotes favorable;U denotes unfavorable):

During February,the firm incurred $600,000 of direct labor costs.According to the standards,each screen door uses one pound of materials at a standard price of $5.00 per pound.The firm produced 100,000 screen doors in February.The materials price variance was $0.40 per pound,whereas the average wage rate exceeded the standard average rate by $0.50 per hour.
Required:
Compute the following for February,assuming there are beginning inventories but no ending inventories of materials:
a.pounds of materials purchased
b.pounds of material usage over standard
c.standard hourly wage rate
d.standard direct labor hours for the total February production
(Howard Company;solving for materials and labor. )

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