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: During the most recent month, the following activity was recorded: 20,500 pounds of material were purchased at a cost of $1.70 per pound. All of the material purchased was used to produce 3,000 units of Zoom. 800 hours of direct labor time were recorded at a total labor cost c of $12,000. Required: Compute the materials price and quantity variances for the month. Compute the labor rate and efficiency variances for the month.

Explanation / Answer

Material Price Variance = ( Std Price per kg- Actual price per kg) Actual Qty (1.90-1.70)20500 4100 Favourable Material Quantity Variance = ( Std Qty- Actual Qty) Std price per pound ( 3000**.6.5-20500)1.9 ( 19500-20500) 1.9 1900 Unfavourable

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