Huron Company produces a commercial cleaning compound known as Zoom. The direct
ID: 2600406 • 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:
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).)
Direct materials price variance
Direct materials quantity variance
Compute the labor rate and efficiency 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). Do not round your intermediate calculations.)
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
1. Material variance :
Material price variance = (Standard price-actual price)actual quantity
= (2.30-2.10)21500
Material price variance = 4300 F
Material usage variance = (Standard quantity-actual quantity)standard price
= (2500*7.4-21500)2.30
Material usage variance = 6900 U
2. labour variance :
Labour rate variance = (Standard rate-actual rate)actual hours
= (8.50*2000-21000)
Labour rate variance = 4000 U
Labour efficiency variance = (Standard hours-actual hours)standard rate
= (2500*0.90-2000)8.50
Labour efficiency variance = 2125 F
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