newconnect.mheducation.com Illinois State University THE 154 001 SP2018- Introdu

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newconnect.mheducation.com Illinois State University THE 154 001 SP2018- Introduction To Black Dra Accounting The auto repair shop of Quality Motor Company uses standards to CH 10 HW 6 Saved Help Save & Exit Submit Check my work 6 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 6 points Quantity or Standard Price Standard Cost 4.6 pounds 2.50 per pound$11.50 3.60 Hours or Rate Direct materials Direct labor 0.2 hours $18.00 per hour eBook Print During the most recent month, the following activity was recorded: a. Twenty thousand pounds of material were purchased at a cost of $2.35 per pound. b. All of the material purchased was used to produce 4,000 units of Zoom. c. 750 hours of direct labor time were recorded at a total labor cost of $14,925. 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.) Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance 2. Mc Graw Hill KPrev 6 of 8 Next>

Explanation / Answer

1 Materials Price variance=20000*(2.35-2.5)= $3000 F Materials Quantity variance=2.5*(20000-4000*4.6)= $4000 U 2 Labor rate variance=14925-(750*18)= $1425 U Labor efficiency variance=18*(750-4000*0.2)= $900 F

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