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 Cost Direct materials Direct labor 7.0 pounds 3.00 per poundS 21.00 S 5.60 4 hours 14.00 per hour During the most recent month, the following activity was recorded: a. Thirteen thousand six hundred pounds of material were purchased at a cost of $2.90 per pound b. The company produced only 1,360 units, using 12,240 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c. 644 hours of direct labor time were recorded at a total labor cost of $7,728. Required: 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).) $ 1,360Favorable Direct materials price variance Direct materials quantity variance

Explanation / Answer

Direct material price variance = (3-2.90)*33600 = 3360 F

Direct material quantity variance = (1360*7-12240)*3 = 8160 U

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