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: Quantity or Standard Price or Rate Standard Direct materials 7.20 pounds S 2.00 per pounds 14.40 Direct labor 0.35 hours S 5.00 per hour S1.75 During the most recent month, the following activity was recorded a. 21,000 pounds of material were purchased at a cost of $1.70 per pound. b. All of the material purchased was used to produce 2,500 units of Zoom. c. 725 hours of direct labor time were recorded at a total labor cost of S5,800. 1. 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).) Direct materials price variance Direct materials quantity variance 2. 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.) Direct labor rate variance Direct labor efficiency variance

Explanation / Answer

Given Data SQ 18000 2500*7.2 SP 2 AQ 21000 AP 1.7 Direct Material Price Variance AQ*(SP - AP) 21000*(2-1.7) 6300 F Direct Material Quantity Variance SP*(SQ - AQ) 2*(18000-21000) 6000 U Given Data SH 875 2500*0.35 SR 5 AH 725 AR 8 5800/725 Direct Labor Rate Variance AH*(SR - AR) 725*(5-8) 2175 U Direct Labor Efficiency Variance SR*(SH - AH) 5*(875-725) 750 F

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