## Answers

**ANSWER=**

**REQUIREMENT- (1A)**

**Computation of Actual Material Cost per Feet for March were as follows:-**

**Material Quantity Variance = (Actual Quantity - Standard Quantity) x Standard Price**

MQV= (AQ - SQ for Actual Production) x SP

$1650 = (AQ - 2875 x 3) x $5

1650 = 5AQ - 43125

AQ = 8955 Feet

**Therefore:-**

**Actual Cost per Feet = $53730 / 8955**

**Thus, Actual Cost per Feet = $6.00 Per Feet**

**REQUIREMENT-(1B)**

i)- Material Price Variance = (Actual Price - Standard Price) x Actual Quantity

= ($6 -$5) x 8955

**Material Price Variance = $8955(Unfavourable)**

ii)- Material Spending Variance = (Actual Price x Actual Quantity) - (Standard Price x Standard Quantity)

= ($6.00 x 8955) - ($5 x 8625)

= $53730 - $43125

**Material Spending Variance = $10605 (Unfavourable)**

**REQUIREMENT-(2)**

**(2a) -**

Labour Rate Variance = Labour Splending Variance - Labour Efficiency Variance

= $3100 - $750

**= $2350(Unfavourable)**

Labour rate Variance = (Actual rate x Actual Hours) - (Standard rate x Actual hours)

$2350 = Actual Labour cost - (Standard rate x 4700)

= Standard rate x 4700 = $37600 - $2350

= $35250 / 4700

*Standard Rate Direct Labour rate = $7.5 Per Hour.*

**2(b)**

Labour Efficiency Variance = (Actual Hours - Standard Hours) x Standard Rate

$750 (U) = (4700 - Standard Hours) x $7.5

**Standard Hours = 4600 Hours**

*Thus,*

*Standard Hours allowed for the month's Production= 4600 Hours.*

**2(c):-**

**Standard Hour allowed per unit of product = 4600 Hours / 2875**

*= 1.6 Hours-(Answer)*