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s//newconnectmho ducation.com/ficw/connect.html?isReg returnUrte https%3A%2F%2Fconnect.mheducation. com%2Fpaamweb%2Finder-.. true G Google 6 bisckbord nkau Go User Dasthboard QNew Tab SearchNKU Webrmalt NonthCnec mework Help Se Exercise 10-6 Direct Materials and Direct Labor Variances [LO104, LO102) 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 Standard Price St Direct materials Direct labor 6.40 pounds $ 2.40 per pound $15.3 0.25 hours 11.50 per hour s 2.88 During the most recent month, the following activity was recorded. a 1750000 pounds of material were purchased at a cost of $2 20 per pound. b All of the material purchased was used to produce 2.500 units of Zoom c 475 hours of direct labor time were recorded at a total labor cost of $5,938 Required: 1. Compute 2 Compute the labor rate and efficiency variances for the month (For ell requirements, indicate the effect of each variance by selecting the materials price and quantity variances for the month F" for favoreble. "U" for unfavorable, and "None" for no zero variancel. Inout all amounts os positive values. Round vour intermediate celculetions to the nearest whole dollar.) ? fo 8 0Explanation / Answer
Std Quantity allowed for actual output (2500 units @ 6.40): 16000 pounds Std price per unit: $ 2.40 Actual Quantity used: 17500 pounds Actual price per unit: $ 2.20 Material Price variance: Actual quantity (Std price -Actual price) 17500 ( 2.4-2.20 ) = 3500 F Material Quantity variance: Std price (Std quantity -Actual quantity) 2.40 (16000-17500) = 3600 U Std labour hours for acatual production (2500*0.25): 625 hours Std rate per hour: 11.50 per hour Actual hours worked: 475 hours Actual rate per hour: 12.501 per hour Labour rate variance: Actual hours (Std rate-Actual rate) 475 ( 11.50 - 12.501) = 476 U Labour Efficiency Variance: Std rate (Std hours-Actual Hours) 11.50 ( 625-475) = 1725 F
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