Question

Chapter 10 Exercises i Saved 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: 20 points Standard Quantity or Standard Price Hours or Rate 6.90 pounds $2.60 per pound 0.30 hours $7.00 per hour Standard Cost $17.94 $ 2.10 Direct materials Direct labor eBook During the most recent month, the following activity was recorded: Ask a. 19,250.00 pounds of material were purchased at a cost of $2.40 per pound. b. All of the material purchased was used to produce 2,500 units of Zoom. c. 450 hours of direct labor time were recorded at a total labor cost of $4,500. Print References Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. (For all requirements, 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. Round your intermediate calculations to the nearest whole dollar.) 1. Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance

Answer 1

1	Materials price variance	3850	F	=19250*(2.4-2.6)
	Materials quantity variance	5200	U	=2.6*(19250-2500*6.9)
2	Labor rate variance	1350	U	=4500-(450*7)
	Labor efficiency variance	2100	F	=7*(450-2500*0.3)