Exercise 10-7 (Static) Direct Materials Variances [LO10-1] Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours 4.6 pounds 0.2 hours During the most recent month, the following activity was recorded: 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 remained in raw materials inventory.) c. 750 hours of direct labor time were recorded at a total labor cost of $14,925. Direct materials Direct labor Standard Price or Rate $ 2.50 per pound. $18.00 per hour Materials price variance Materials quantity variance Standard Cost $11.50 $ 3.60 Required: Compute the materials price and quantity variances for the month. Note: 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.
Exercise 10-7 (Static) Direct Materials Variances [LO10-1] Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours 4.6 pounds 0.2 hours During the most recent month, the following activity was recorded: 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 remained in raw materials inventory.) c. 750 hours of direct labor time were recorded at a total labor cost of $14,925. Direct materials Direct labor Standard Price or Rate $ 2.50 per pound. $18.00 per hour Materials price variance Materials quantity variance Standard Cost $11.50 $ 3.60 Required: Compute the materials price and quantity variances for the month. Note: 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
Please do not give solution in image format thanku
![Exercise 10-7 (Static) Direct Materials Variances [LO10-1]
Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom
are given below:
Standard Quantity
or Hours
4.6 pounds
0.2 hours
During the most recent month, the following activity was recorded:
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 remained in raw
materials inventory.)
c. 750 hours of direct labor time were recorded at a total labor cost of $14,925.
Direct materials
Direct labor
Standard Price or Rate
$ 2.50 per pound
$18.00 per hour
Materials price variance
Materials quantity variance
Standard
Cost
$11.50
$ 3.60
Required:
Compute the materials price and quantity variances for the month.
Note: 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6ff57eeb-02cd-4ad2-bfa7-7cf3c326946a%2F5ac7ae40-b049-468d-8de7-a589a0230c49%2Fd1hf9d_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 10-7 (Static) Direct Materials Variances [LO10-1]
Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom
are given below:
Standard Quantity
or Hours
4.6 pounds
0.2 hours
During the most recent month, the following activity was recorded:
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 remained in raw
materials inventory.)
c. 750 hours of direct labor time were recorded at a total labor cost of $14,925.
Direct materials
Direct labor
Standard Price or Rate
$ 2.50 per pound
$18.00 per hour
Materials price variance
Materials quantity variance
Standard
Cost
$11.50
$ 3.60
Required:
Compute the materials price and quantity variances for the month.
Note: 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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education