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:

Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials

6.40 pounds $ 3.00 per pound $ 19.20 Direct labor 0.40 hours $ 11.00 per hour $ 4.40

During the most recent month, the following activity was recorded: Twelve thousand four hundred pounds of material were purchased at a cost of $2.90 per pound. The company produced only 1,240 units, using 11,160 pounds of material. (The rest of the material purchased remained in raw materials inventory.) 596 hours of direct labor time were recorded at a total labor cost of $7,152.

What is the Materials Quantity Variance?

Explanation / Answer

Materials Quantity Variance = 3*(11160-1240*6.40)= $9672 U

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