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 or Standard Price Standard Hours or Rate Direct materials Direct labor 6.80 pounds $2.90 per pound 0.20 hours Cost $19.72 $1.80 $9.00 per hour During the most recent month, the following activity was recorded a. 15,100.00 pounds of material were purchased at a cost of $2.60 per pound b. All of the material purchased was used to produce 2,000 units of Zoom C. 300 hours of direct labor time were recorded at a total labor cost of $3,300. 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 effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations to the nearest whole dollar.)

Explanation / Answer

1a) Material price variance = (2.9-2.60)*15100 = 4530 F

Material quantity variance = (2000*6.8-15100)*2.9 = 4350 U

1b) Labour rate variance = (9*300-3300) = 600 U

Labour efficiency variance = (2000*0.20-300)*9 = 900 F

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