Chapter 10 Regular Horm 7 ommercial cleaning compound known as Zoom. The direct

Question

Chapter 10 Regular Horm 7 ommercial cleaning compound known as Zoom. The direct mat Huron Company proo unit of Zoom are given nd direct labor standards for one Standard Quantity or Hours 5.20 pounds Standard Price or Rate Standard Cost $15.60 $ 2.00 $3.00 per pound Direct materials Direct labor $5.00 per hour 04:5227 0.40 hours During the most recent month, the following activity was recorded a. Ten thousand pounds of material were purchased at a cost of $2.90 per pound b. The company produced only 1,000 units, using 8,000 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c 500 hours of direct labor time were recorded at a total labor cost of $6,000 Required Compute the favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.) es ials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for Is price variance Materials quantity variance

Explanation / Answer

1) Material price variance = (3-2.90)*10000 = 1000 F

Material quantity variance = (1000*5.2-8000)*3 = 8400 U

2) Labour price variance = (5*500-6000) = 3500 U

Labour efficiency variance = (1000*0.40-500)*5 = 500 U

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