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: Direct materials Direct labor Standard Quantity or Hours 7.20 pounds 0.50 hours Standard Price or Rate. $2.90 per pound Standard Cost $ 20.88 $ 5.00 $ 10.00 per hour During the most recent month, the following activity was recorded: a. 16,900.00 pounds of material were purchased at a cost of $2.60 per pound. b. All of the material purchased was used to produce 2,000 units of Zoom. c. 800 hours of direct labor time were recorded at a total labor cost of $8,800. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. (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
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: Direct materials Direct labor Standard Quantity or Hours 7.20 pounds 0.50 hours Standard Price or Rate. $2.90 per pound Standard Cost $ 20.88 $ 5.00 $ 10.00 per hour During the most recent month, the following activity was recorded: a. 16,900.00 pounds of material were purchased at a cost of $2.60 per pound. b. All of the material purchased was used to produce 2,000 units of Zoom. c. 800 hours of direct labor time were recorded at a total labor cost of $8,800. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. (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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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:
Direct materials
Direct labor
Standard Quantity
or Hours
7.20 pounds
0.50 hours
Standard Price or Rate.
$2.90 per pound
Standard
Cost
$ 20.88
$ 5.00
$ 10.00 per hour
During the most recent month, the following activity was recorded:
a. 16,900.00 pounds of material were purchased at a cost of $2.60 per pound.
b. All of the material purchased was used to produce 2,000 units of Zoom.
c. 800 hours of direct labor time were recorded at a total labor cost of $8,800.
Required:
1. Compute the materials price and quantity variances for the month.
2. Compute the labor rate and efficiency variances for the month.
(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
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