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: Standard Quantity or Hours 7.10 pounds 0.50 hours Standard Price or Rate $ 2.50 per pound $14.50 per hour Standard Cost $17.75 $ 7.25 Direct materials Direct labor During the most recent month, the following activity was recorded: a. Thirteen thousand eight hundred pounds of material were purchased at a cost of $2.40 per pound. b. The company produced only 1,380 units, using 12,420 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c. 790 hours of direct labor time were recorded at a total labor cost of $9,480. 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.) X Answer is complete but not entirely correct. Materials price variance $ $ 1,380F 7,350 X Materials quantity variance U

Can you please find the correct input for the materials quantity variance. The second picture explains how to find it.

Disclaimer: The answer is neither 6,555 or 10,005. Have already tried those and it is wrong.

Answer 1

Ans. 1	Actual Cost		Actual quantity at Standard price		Standard Cost
	Actual quantity * Actual price		Actual quantity * Standard price		Standard quantity * Standard price
	13,800 * $2.40		13,800 * $2.50		9,798 * $2.50
	$33,120		$34,500		$24,495
		$1,380		-$10,005
	Materials price variance	$1,380	favorable
	Materials quantity variance	-$10,005	or   $10,005 Unfavorable
	Total Materials Variance	-$8,625	or   $8,625 Unfavorable
	*Materials price variance = Actual quantity at standard price - Actual cost
	*Materials quantity variance = Standard cost - Actual quantity at standard price
	*Standard quantity (SQ)   =   Actual output * Materials quantity per unit of output
	1,380 * 7.10 pounds
	9,798	pounds
	*If the standard cost, price and quantity are higher than the actual it means the variance is favorable.
	*If the standard cost, price and quantity are lower than the actual it means the variance is unfavorable.