Diamond Company makes one product and has set the following
standards for materials and labor:

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Question: Diamond Company makes one product and has set the following standards for materials and labor: …
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Direct
Materials
Direct Labor
  Standard quantity or
hours per unit
? pounds 2.10
  
hours
  Standard price or
rate
? per
pound
$ 8.50
  
per hour
  Standard cost per
unit
? $ 17.85
  

During the past month, the company purchased 6,200 pounds of
direct materials at a cost of $17,050. All of this material was
used in the production of 1,300 units of product. Direct labor cost
totaled $20,070 for the month. The following variances have been
computed:

  Materials quantity
variance
$ 1,200 U  
  Total materials
spending variance
$ 350 F  
  Labor efficiency
variance
$ 4,250 F  
Required:
1. For direct materials:
a.

Compute the standard price per pound for materials. (Do
not round intermediate calculations. Round your answer to 2 decimal
places.)

Standard
price
per
pound
b.

Compute the standard quantity allowed for materials for the
month’s production.

Standard
quantity
pounds
c.

Compute the standard quantity of materials allowed per unit of
product. (Round your answer to 2 decimal
places.)

Standard
quantity
pounds
per unit
2. For direct labor:

a. Compute the actual direct labor
cost per hour for the month.

Actual
direct labor cost per hour
b.

Compute the labor rate variance. (Input the amount as
positive value. Do not round intermediate calculations. Indicate
the effect of the variance by selecting “F” for favorable, “U” for
unfavorable, and “None” for no effect (i.e., zero
variance).)

Labor
rate variance

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