Huron Company produces a commercial cleaning compound known as Zoom. The direct
ID: 2545426 • Letter: H
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:
During the most recent month, the following activity was recorded:
Twelve thousand eight hundred pounds of material were purchased at a cost of $2.90 per pound.
The company produced only 1,280 units, using 11,520 pounds of material. (The rest of the material purchased remained in raw materials inventory.)
612 hours of direct labor time were recorded at a total labor cost of $7,344.
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). Input all amounts as positive values. Do not round intermediate calculations.)
Standard Quantity or Hours Standard Priceor Rate Standard
Cost Direct materials 6.60 pounds $ 3.00 per pound $ 19.80 Direct labor 0.40 hours $ 12.00 per hour $ 4.80
Explanation / Answer
Materials price variance=12800*(2.9-3)= $1280 F Materials quantity variance=3*(11520-1280*6.60)= $9216 U
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