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:

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).)

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).)

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:

Explanation / Answer

Req 1: Std material Qty required per unit of output 4.6 pounds Actual output 4000 units Std Qty required for actual output (4000*4.6) = 18,400 pounds Std price per pound $ 2.50 per pound Actual Qty consumed 20,000 pounds Actual price per pound $ 2.35 per pound Material price variance = Actual Qty consumed(Std price per pound- Actual price per pound) 20,000 ( 2.50 -2.35 ) = $ 3,000 fav Material Qty Variance= Std price per pound (Std Qty required for actual output - Actual Qty consumed) 2.50 ( 18400 -20000) = $ 4,000 unfav Req :2 Std labour hour required per unit of output = 0.2 hour per unit Actual output 4000 units Std labour hours required for actual output (4000*0.2) =800 hours Std labour rate per hour $ 12 per hour Actual labour hours 750 hours Actual Labour rate per hour (10425/750 ) = $ 13.90 per hour labour rate variance= Actual hours (Std rate per hour-Actual rate per hour) 750 ( 12-13.90) = $ 1,425 unfav Labour efficiency variance= Std rate per hour(Std labour hours-Actual Labour horus) 12 ( 800-750)= $600 fav

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