Huron Company produces a commercial cleaning compound known as Zoom The direct m

Question

Huron Company produces a commercial cleaning compound known as Zoom The direct materials and direct labor standards tor one unit of Zoom are given below During the most recent month, the following activity was recorded a. Twenty thousand pounds of material were purchased at a cost of $2 35 per pound b. All ol the material purchased was used to produce 4 000 units of Zoom c.750 houis ot duect labor time were recorded at a total labor cost of $ 10.425. Required: 1.Computo the materials price and quantity variances lor the month. 2.Computo the labor lato and efficioncy variances loi Ihe month.

Explanation / Answer

Direct Material Price Variance (Standar Price - Actual Price)Actual Quantity (2.5-2.35) * 4000 600 Favourable Direct Material Quantity Variance (Standar Quantity - Actual Quantity) 4348-4000 348 Adverse Standard Quantity Actual Material Purchased/Standard Quantity per unit Direct labour rate Variance Actual Cost - Standard Cost of the Actual Hours 10425-(750*12) 1425 Adverse Direct labour efficiency Variance Standard Cost of Actual Hours - Standard Cost (750*12)-(4000*2.4) -600 Favourable

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