Huron Company produces a commercial cleaning compound known as Zoom. The direct
ID: 2446483 • Letter: H
Question
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:
The company produced only 1,180 units, using 10,620 pounds of material. (The rest of the material purchased remained in raw materials inventory.)
Compute the materials price and quantity variances for the month. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:
Explanation / Answer
Material Price Variance based on Materials Purchased
Actual cost= Actual Quantity Purchased*Actual cost
=11,800*2.40
=$28,320
Standard Cost= Actual quantity*Standard Cost
= 11,800*2.5
29,500
Material Price variance based on Materil purchase= 28,320-29,500
=$1,180(F)
Material Price Variance base on Materials used
Actual cost= Materials used*Actual Price
= 10,620*2.4
= $25,488
Material Price Variance on the basis of Material used= $25,488-$26,550
=$1062(F)
Material Quanity Variance based on Material used
Actual cost= Actual quantity used*Standard price
=10,620*2.5
=$26,550
tandard cost= Standard Quantity*Standard rate
=(1180*6.1)*2.5
=17,995
Material quantity Variance= 26,550-17995
=8555(U)
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