I\'m a tad lost. Huron Company produces a commercial cleaning compound known as

Question

I'm a tad lost.

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:

19,250.00 pounds of material were purchased at a cost of $2.40 per pound.

All of the material purchased was used to produce 2,500 units of Zoom.

450 hours of direct labor time were recorded at a total labor cost of $4,500.

Required:

1. Compute the materials price and quantity variances for the month.

2. Compute the labor rate and efficiency variances for the month.

(For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations to the nearest whole dollar.)

Standard Quantity or Hours Standard Price
or Rate Standard
Cost Direct materials 6.90 pounds $ 2.60 per pound $ 17.94 Direct labor 0.30 hours $ 7.00 per hour $ 2.10

Explanation / Answer

Materials price variance = Actual quantity * (Actual price - Standard price)

= 19250 * (2.40 - 2.60)

= 3850 Fav

Materials quantity variance = Standard price * (Actual quantity - Standard quantity)

= 2.60 * (19250 - (2500*6.90))

= 5200 unfav

Labor rate variance = Actual hours * (Actual rate - standard rate)

= 450 * ((4500/450) - 7)

= 1350 Unfav

Labor efficiency variance = Standard rate * (Actual hours - Standard hours)

= 7 * (450 - (2500*.30))

- = 7 *(450-750)

= 2100 Fav

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