# Topaz Company makes one product and has set the following standards for materials

P11-13 Topaz Company makes one product and has set
the following standards for materials and labor:

Direct

Direct
Materials
Labor

Standard quantity or hours per unit . . . .
? pounds
2.5 hours
Standard price or rate . . . . . . . . . . . . . .
? per pound
\$9.00 per hour
Standard cost per unit . . . . . . . . . . . . . .
?

\$22.50

During the past month, the company purchased 6,000
pounds of direct materials at a cost of \$16,500. All of this material was used
in the production of 1,400 units of product. Direct labor cost totaled \$28,500
for the month. The following variances have been computed:

Materials quantity variance . . . . . . . . . . . .
. . . \$1,200 U
Total materials spending variance . . . . . . . . .
. \$300 F
Labor efficiency variance . . . . . . . . . . . . .
. . . . \$4,500 F

Required:
1. For direct materials:
a.Compute the standard price per pound for materials.
b.Compute the standard quantity allowed for materials
for the month’s production.
c.Compute the standard quantity of materials allowed
per unit of product.
2. For direct labor:
a.Compute the actual direct labor cost per hour for
the month.
b.Compute the labor rate variance.
(Hint: In completing the problem, it may be helpful
to move from known to unknown data either by using the variance formulas or by
using the columnar format shown in Exhibits 10–5 and 10–6 .)

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