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:

The company produced only 3,000 units, using 14,750 pounds of material. (The rest of the material purchased remained in raw materials inventory.)

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).)

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

Standard Quantity

4.6*3000

13800

Standard Price

2.5

Actual Quantity

14750

Actual Price

2.35

Direct Material Price Variance:

Actual Quantity *(Standard Price - Actual Price)

14750*(2.5 - 2.35)

14750*0.15

2212.5 Favourable

Direct Material Quantity Variance

Standard Price*(Standard Quantity - Actual Quantity)

2.5 *(13800 - 14750)

2.5*(-950)

-2375

2375 Unfavourable

Standard Quantity

4.6*3000

13800

Standard Price

2.5

Actual Quantity

14750

Actual Price

2.35

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