Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Direct materials Direct labor Standard Quantity or Hours 7.30 pounds 0.60 hours Standard Price or Rate $ 2.80 per pound Standard Cost $ 20.44 $ 9.00 per hour $ 5.40 During the most recent month, the following activity was recorded: a. 16,600.00 pounds of material were purchased at a cost of $2.50 per pound. b. All of the material purchased was used to produce 2,000 units of Zoom. c. 1,000 hours of direct labor time were recorded at a total labor cost of $12,000. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. Note: 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. 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question
None
Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom
are given below:
Direct materials
Direct labor
Standard Quantity
or Hours
7.30 pounds
0.60 hours
Standard Price or Rate
$ 2.80 per pound
Standard
Cost
$ 20.44
$ 9.00 per hour
$ 5.40
During the most recent month, the following activity was recorded:
a. 16,600.00 pounds of material were purchased at a cost of $2.50 per pound.
b. All of the material purchased was used to produce 2,000 units of Zoom.
c. 1,000 hours of direct labor time were recorded at a total labor cost of $12,000.
Required:
1. Compute the materials price and quantity variances for the month.
2. Compute the labor rate and efficiency variances for the month.
Note: 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.
1. Materials price variance
1. Materials quantity variance
2. Labor rate variance
2. Labor efficiency variance
Transcribed Image Text:Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Direct materials Direct labor Standard Quantity or Hours 7.30 pounds 0.60 hours Standard Price or Rate $ 2.80 per pound Standard Cost $ 20.44 $ 9.00 per hour $ 5.40 During the most recent month, the following activity was recorded: a. 16,600.00 pounds of material were purchased at a cost of $2.50 per pound. b. All of the material purchased was used to produce 2,000 units of Zoom. c. 1,000 hours of direct labor time were recorded at a total labor cost of $12,000. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. Note: 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. 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Performance measurements
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
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education