8:6 Huron Company produces a commercial cleaning compound known as Zoom. The dir

Question

8:6

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: During the most recent month, the following activity was recorded: Twelve thousand two hundred pounds of material were purchased at a cost of $2.40 per pound. The company produced only 1,220 units, using 10,980 pounds of material. (The rest of the material purchased remained in raw materials inventory.) Seven hundred and ten hours of direct labor time were recorded at a total labor cost of $8,520. 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).)

Explanation / Answer

Details Amount Favaroble/Unfavaroble Direct material Price Variance Actul Purchase Qty*(AR-SR) 12200*(2.4-2.5) 1220 F Direct material Qty variance (Actual consumption-Std cosnsumption for actual production)* Std rate 10980-(1220*6.3)*2.5 8235 U

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