Huron Company produces a commercial cleaning compound known as zoom Ch 10 Connec
ID: 2405354 • Letter: H
Question
Huron Company produces a commercial cleaning compound known as zoom Ch 10 Connect 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 Quantity or standard Price Standard 0 83 points 4.6 pounds 8.2 hours 2.50 per pound Direct labor 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 Pint References 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 ?Prev 6 or 12 Next >Explanation / Answer
Data for calculating variances
Material price variance
=(Standard rate-actual rate) *actual quantity
=(2.50-2.35)*20000=3000favourable
Material quantity variance
=(standard quantity for actual produce - actual qty) std.rate
=(4000*4.6-20000)*2.50=4000adverse.
Labour rate variance
=(standard rate per hour - Actual rate) *actual hour
=(18-19.9*)750=1425 adverse
*actual Labour rate =14925/750=19.9
Labour efficiency variance
=(standard hour for actual production-actual hour) std.rate
=(4000*.2-750)*18=900favourable
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