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

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:

Compute the materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Compute the labor rate and efficiency variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round your intermediate calculations.)

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 = (Actual Quantity * Actual Price) - (Actual Quantity * Standered Price) (21,500*2.10)-(21,500*2.30) = 4,300 F Meterial Quantity variance = (Standard Quantity - Actual Quantity) * Standared Price ((7.40*2500)-21,500)*2.30 = 6,900 U Labour rate variance = (Actual Quantity * Actual Price) - (Actual Quantity * Standered Price) (21,000)-(2,000*8.50) = 4,000 U Labour efficeincy variance = (Actual Hours * Standard Rate) - (Standard Hours * Standard Rate) (2,000*8.50)-((2,500*0.90)*8.50) = 2,125 F

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