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Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one

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Answer #1
Ans. 1 a Materials price variance = (Standard price   - Actual price) * Actual quantity
($2.30 - $2.10) * 11,000
$0.20 * 11,000
$2,200 Favorable
Ans. 1 b Direct materials quantity variance = (Standard quantity - actual quantity) * Standard price
(9,000 - 11,000) * $2.30
-2,000* $2.30
-$4,600 or   $4,600 unfavorable
*Standard quantity = Actual output * Standard quantity per unit of output
1,500 units * 6 pounds
9,000 pounds
Ans. 2 a Direct labor rate variance = (Standard rate   - Actual rate) * Actual hours
($10 - $13) * 500
-$3 * 500
-$1,500 or   $1,500 unfavorable
*Actual rate   = Actual labor cost / Actual hours
$6,500 / 500
$13.00 per hour
Ans. 2 b Direct labor efficiency variance = (Standard hours - actual hours) * Standard rate
(750 - 500) * $10
250 * $10
$2,500 favorable
*Standard hours = Actual output * Standard hours per unit of output
1,500 units * 0.50 hrs.
750 hours
*If the standard cost, rate or price and hours or quantity are higher than the actual it means the variance is favorable.
*If the standard cost, rate or price and hours or quantity are lower than the actual it means the variance is unfavorable.
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