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 7.00 pounds 0.40 hours Materials price variance Materials quantity variance During the most recent month, the following activity was recorded: a. Thirteen thousand six hundred pounds of material were purchased at a cost of $2.90 per pound. b. The company produced only 1,360 units, using 12,240 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c. 644 hours of direct labor time were recorded at a total labor cost of $7,728. Standard Price or Rate $ 3.00 per pound $14.00 per hour 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. Do not round intermediate calculations. $ $ Standard Cost $ 21.00 $ 5.60 1,360 F 6,840 U
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 7.00 pounds 0.40 hours Materials price variance Materials quantity variance During the most recent month, the following activity was recorded: a. Thirteen thousand six hundred pounds of material were purchased at a cost of $2.90 per pound. b. The company produced only 1,360 units, using 12,240 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c. 644 hours of direct labor time were recorded at a total labor cost of $7,728. Standard Price or Rate $ 3.00 per pound $14.00 per hour 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. Do not round intermediate calculations. $ $ Standard Cost $ 21.00 $ 5.60 1,360 F 6,840 U
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 26BEA: Use the following information to complete Brief Exercises 10-25 and 10-26: Tico Inc. produces...
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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.
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![Exercise 10-7 (Algo) 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:
Direct materials
Direct labor
Standard Quantity or
Hours
7.00 pounds
0.40 hours
Materials price variance
Materials quantity variance
During the most recent month, the following activity was recorded:
a. Thirteen thousand six hundred pounds of material were purchased at a cost of $2.90 per pound.
b. The company produced only 1,360 units, using 12,240 pounds of material. (The rest of the material purchased remained in raw
materials inventory.)
c. 644 hours of direct labor time were recorded at a total labor cost of $7,728.
Standard Price or Rate
$ 3.00 per pound
$14.00 per hour
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. Do not round intermediate calculations.
$
$
Standard Cost
$ 21.00
$5.60
1,360 F
6,840 U](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F12f89404-9056-4a5e-9aa8-48d95e7d14f7%2F189f5b97-e21d-476d-aec9-747e9e70270d%2Fmhudk5o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 10-7 (Algo) 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:
Direct materials
Direct labor
Standard Quantity or
Hours
7.00 pounds
0.40 hours
Materials price variance
Materials quantity variance
During the most recent month, the following activity was recorded:
a. Thirteen thousand six hundred pounds of material were purchased at a cost of $2.90 per pound.
b. The company produced only 1,360 units, using 12,240 pounds of material. (The rest of the material purchased remained in raw
materials inventory.)
c. 644 hours of direct labor time were recorded at a total labor cost of $7,728.
Standard Price or Rate
$ 3.00 per pound
$14.00 per hour
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. Do not round intermediate calculations.
$
$
Standard Cost
$ 21.00
$5.60
1,360 F
6,840 U
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