Question

Al-Shabad Company produces a single product. The company has set the following standards for material and labor.

	Standard quantity/hours per unit	standard price/rate
direct materials	7 pounds per unit	$7 per pound
direct labor	3 hours per unit	$10 per hour

During the past month the company purchased 7,000 pounds of direct materials at a cost of $17,500. All of this material was used in production of 1,300 units of product. Direct labor totaled $36,750 for the month. The following variances have been computed

Materials quantity variance	$1,375 U
Total Materials variance	$375 F
labor efficiency variance	$4,000 F

1) compute standard price per pound of materials for direct materials

2) for direct labor compute the actual direct labor cost per hour for the month

Answer 1