Calculation of variances for direct material and direct labor.
Nevada Learning Aids makes wooden lap desks. A small fire on October 1 partially destroyed the books and records relating to September's production. The charred remains of the standard cost card contains the following information:
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Standard quantity of direct material
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5.0 board feet
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Standard price of direct labor
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$12.50 per hour
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From other fragments of records and several discussions with employees, you learn the following:
- The standard quantity of material used in September was 4,000 board feet.
- The September payroll for direct labor was $19,220 based on 1,550 actual hours worked.
- The production supervisor distinctly remembered being held accountable for 50 more hours of direct labor than should have been worked. She was upset because top management failed to consider that she saved several hundred board feet of material by creative efforts that required extra time.
- The purchasing agent\'s files showed that 4,300 board feet had been purchased and consumed in September for $2.05 per board foot. She was proud of the fact that this price was $.05 below standard cost per foot.
Required:
a. How many units were produced during September?
b. Calculate all variances for direct material and direct labor for September.
c. What is the standard number of hours allowed for the production of each unit?