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 Standard Price or Rate Standard Cost 4.6 $ 2.50 0.2 $18.00 Direct materials pounds hours Direct labor During the most recent month, the following activity was recorded: 1. Twenty thousand pounds of material were purchased at a cost of $2.35 per pound. 2. The company produced only 3,000 units, using 14,750 pounds of material. (The rest of the material purchased remained in raw materials inventory.) 3.750 hours of direct labor time were recorded at a total labor cost of $14,925. Required: Compute the materials price and quantity variances for the month. per pound $ 11.50 per hour $ 3.60
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 Standard Price or Rate Standard Cost 4.6 $ 2.50 0.2 $18.00 Direct materials pounds hours Direct labor During the most recent month, the following activity was recorded: 1. Twenty thousand pounds of material were purchased at a cost of $2.35 per pound. 2. The company produced only 3,000 units, using 14,750 pounds of material. (The rest of the material purchased remained in raw materials inventory.) 3.750 hours of direct labor time were recorded at a total labor cost of $14,925. Required: Compute the materials price and quantity variances for the month. per pound $ 11.50 per hour $ 3.60
Chapter1: Financial Statements And Business Decisions
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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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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:
Standard Quantity or Hours Standard Price or Rate Standard Cost
4.6
$ 2.50
0.2
$18.00
Direct materials
pounds
hours
Direct labor
During the most recent month, the following activity was recorded:
1. Twenty thousand pounds of material were purchased at a cost of $2.35 per pound.
2. The company produced only 3,000 units, using 14,750 pounds of material. (The rest of the material purchased
remained in raw materials inventory.)
3.750 hours of direct labor time were recorded at a total labor cost of $14,925.
Required:
Compute the materials price and quantity variances for the month.
per pound $ 11.50
per hour $ 3.60
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