Exercise 8-13 Direct Materials and Direct Labor Variances [LO8-4, LO8-5] Huron C

Question

Exercise 8-13 Direct Materials and Direct Labor Variances [LO8-4, LO8-5]

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).)

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

1 Materials price variance=20000*(2.35-2.50)= $3000 F Materials quantity variance=2.5*(20000-4000*4.6)= $4000 U 2 Labor rate variance=10425-(750*12)= $1425 U Labor efficiency variance = 12*(750-4000*0.2)= $600 F

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