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iPad 11:27 PM * 16% 1 ezto.mheducation.com Unit 2 Study Question iPad3:11 PM Ezto.m Chegg Study | Guided Question 3 (of Chegg Study l Guided Hw Chpt 8 Ve value: 5.00 points 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 or Hours Standard Price or Rate Standard Cost Direct materials 6.9 pounds 2.50 per pound $17.25 Direct labor 0.5 hours $13.50 per hour 6.75 During the most recent month, the following activity was recorded: a. Thirteen thousand four hundred pounds of material were purchased at a cost of $2.40 per pound b. The company produced only 1,340 units, using 12,060 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c. Seven hundred and seventy hours of direct labor time were recorded at a total labor cost of $9,240 Required Compute the materials price and quantity variances for the month. Do not round intermediate calculations. 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 References eBook & Resources Worksheet Difficulty: 1 Easy Learning Objective: 08-04 Compute the direct material price and quantity variances and explain their significaExplanation / Answer
Direct Material Price Variance = (Standard Rate - Actual Rate) x Actual Quantity = ( 2.50 - 2.40) x 13400 = 1340 Fav Direct Material Quantity Variance = (Standard Quantity - Actual Quantity) x Standard Rate = ( 1340 x 6.90 - 12060) x 2.50 = 7035 Unfav
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