Huron Com direct labor standards for one unit of Zoom are given below: pany prod
ID: 2577340 • Letter: H
Question
Huron Com direct labor standards for one unit of Zoom are given below: pany produces a commercial cleaning compound known as Zoom. The direct materials and Standard Quantity or Hours Standard Standard Price or Rate Direct materials 6.4 pounds Direct labor Cost 3.00 per pound $19.20 $ 4.40 0.4 hours $11.00 per hour During the most recent month, the following activity was recorded a. Twelve thousand four hundred pounds of material were purchased at a cost of $2.90 per pound b. The company produced only 1,240 units, using 11,160 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c. Five hundred and ninety six hours of direct labor time were recorded at a total labor cost of $7,152. Required Compute the materials price and quantity variances for the month. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Direct materials price variance $ 1,240 Direct materials quantity varianceExplanation / Answer
For one unit ZOOM Standar Qty. or Hours Standard Price or Rate Standard Cost Direct Material 6.4 pounds $ 3.00 per pound $ 19.20 Direct Labor 0.4 hours $ 11.00 per hour $ 4.40 The material price variance is computed for the entire amount of material purchased, whereas the material quantity variance is computed only for the amount of material used in production. Direct materials price variance = (Actual price per unit– Standard price per unit) x Actual Quantity (2.9-3.00)* 12400 $ 1240 ( F ) Direct materials quantity variance = Standard price x (Actual Qty. – Standard Qty.) ( 11160 pounds -7936 pounds)* 3.00 $ 9672 (U) Standard material Qty for producing 1240 units = 1240*6.4= 7936 pounds
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