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 Standard Quantity Standard Price Standard Direct materials Direct labor 5.80 pounds 0.40 hours $3.00 per $8.08 per hour 3.20 pound $17.48 During the most recent month, the foilowing activity was recorded a. Eleven thousand two hundred pounds of material were purchased at a cost of $2.90 per pound b. The company produced only 1,120 units, using 10,080 pounds of material. (The rest of the material purchased remained in raw materials inventory) 548 hours of direct labor time were recorded at a total labor cost of S6.576 C Required: price and quantity variances for the month. Indicate the effect of each variance by selecting "F for fevorable, "U" for unfevorable, and "None" for no effect (i.e, intermediate colculntions.) zero variance) Input all amounts as positive values. Do not round 40

Explanation / Answer

Material Price Variance $           1,008 F Material Quantity Variance $         10,752 U Workings: Material Price Variance = (Standard Price-Actual Price)*Actual Quantity = (3.00-2.90)*10080 = $           1,008 Material Quantity Variance = (Standard quantity-Actual Qunatity)*Standard Price = (6496-10080)*3.00 = $       -10,752 Working: Standard Price = $             3.00 per pound Actual Price = $             2.90 per pound Standard quantity = Actual Productions x Standard quantity per unit of production =               1,120 x           5.80 Pound per unit =               6,496 Pounds Actual Quantity =             10,080 Pounds

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