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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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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.
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