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 7.50 pounds Standard Price Standard or Rate $2.40 per pound $7.00 per hour Cost Direct materials Direct labor $18.00 $ 5.60 0.80 hours During the most recent month, the followingg activity was recorded a. Thirteen thousand two hundred and fifty pounds of material were purchased at a cost of $2.20 per pound b. All of the material purchased was used to produce 1.500 units of Zoom. c. 1000 hours of direct labor time were recorded at a total labor cost of $9.000 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.) Materials price varance 1 Materials quantity variance Labor rate variance 2 Labor efficiency variance Next Prev

Answer 1

1) Material price variance = (2.4-2.20)*13250 = 2650 F

Material quantity variance = (1500*7.5-13250)*2.4 = 4800 U

2) Labor rate variance = (7*1000-9000) = 2000 U

Labor efficiency variance = (1500*.80-1000)*7 = 1400 F

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