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:

Please help me correct my error, provide me the way to do it too if possible:

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 Standard Price or Rate Standard Cost $16.25 5.75 Direct materials Direct labor 6.5 pounds 0.5 hours $ 2.50 per pound $11.50 per hour During the most recent month, the following activity was recorded a. Twelve thousand six hundred pounds of material were purchased at a cost of $2.40 per pound b. The company produced only 1,260 units, using 11,340 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c. Seven hundred and thirty hours of direct labor time were recorded at a total labor cost of $8,760 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). Do not round intermediate calculations.) Answer is complete but not entirely correct. Direct materials price $ 1,260F variance Direct materials quantity $ 11,025 x U variance

Answer 1

Direct materials quantity variance = $7,875 (U)

Calculation :

Direct material quantity variance = (AQ × SP) - (SQ × SP)

Firstly, we will calculate standard quantity

Standard quantity = 1,260 units × 6.5 pounds per unit = 8,190

Now, we will calculate direct material quantity variance,

Direct Material Quantity Variance = (11,340 × $2.50) - (8,190 × $2.50)

= $28,350 - $20,475

= $7,875 (U)

Note : We will calculate direct material quantity variance only for the amount of materials used in production.