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 46 pounds 0 2 hours Standard Price or Rate $250 per pound $12.00 per hour Standard Cast $ 1150 2.40 Direct materials Direct During the most recent month, the following activity was recorded w s ) a Twenty thousand pounds of material were purchased at a cost of $2.35 per pound b The company produced only 3 000 units using 14.750 pounds of material (The rest of the material purchased remane c. 750 hours of direct labor time were recorded at a total labor cost of $10,425 for favor Required: 1. Compute the materials price and quantity variances for the month indicate the effect of each variance by selecting zero variance)) Direct manascevance Direct ma is quantity Variance

Answer 1

Direct material price variance = (Standard price-actual price)actual quantity = (2.50-2.35)*20000 = 3000 F

Direct material quantity variance = (standard qty-actual qty)Standard price = (3000*4.6-14750)*2.5 = 2375 U