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: Standard Quantity or Hours 6.50 pounds 0.30 hours Standard Price or Rate $ 1.90 per pound Direct materials. Direct labor $ 13.00 per hour During the most recent month, the following activity was recorded: Standard Cost $ 12.35 $ 3.90 a. Twenty thousand five hundred pounds of material were purchased at a cost of $1.70 per pound. b. All of the material purchased was used to produce 3,000 units of Zoom. c. 800 hours of direct labor time were recorded at a total labor cost of $12,000. 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance 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.)
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: Standard Quantity or Hours 6.50 pounds 0.30 hours Standard Price or Rate $ 1.90 per pound Direct materials. Direct labor $ 13.00 per hour During the most recent month, the following activity was recorded: Standard Cost $ 12.35 $ 3.90 a. Twenty thousand five hundred pounds of material were purchased at a cost of $1.70 per pound. b. All of the material purchased was used to produce 3,000 units of Zoom. c. 800 hours of direct labor time were recorded at a total labor cost of $12,000. 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance 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.)
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
Rate
$ 1.90 per pound
$ 13.00 per hour
During the most recent month, the following activity was recorded:
Standard Price or
6.50 pounds
0.30 hours
1. Materials price variance
1. Materials quantity variance
2. Labor rate variance
2. Labor efficiency variance
Standard
Cost
$ 12.35
$3.90
a. Twenty thousand five hundred pounds of material were purchased at a cost of $1.70
per pound.
b. All of the material purchased was used to produce 3,000 units of Zoom.
c. 800 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.
(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.)
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