Required: Compute the materials price and quantity variances for the month (Indicate the effect of each verlience by selecting "" for favoreble, "U" for unfavorable, and "None" for no effect (Le., zero verlence). Input all amounts es positive values.) Matenais price variance Materials quantity variance
Required: Compute the materials price and quantity variances for the month (Indicate the effect of each verlience by selecting "" for favoreble, "U" for unfavorable, and "None" for no effect (Le., zero verlence). Input all amounts es positive values.) Matenais price variance Materials quantity variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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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Transcribed Image Text:Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct la CLI
unit of Zoom are given below
Direct materials
Direct labor
Standard
Quantity or
Hour's
7.00 pounds
0.40 hours
Materials price vanance
Materials quantity variance
Standard Price or Rate Standard Cost
$ 3.00 per poundi
$ 21.00
$14.00 per hour
$5.60
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
Required:
Compute the materials price and quantity variances for the month (Indicate the effect of each verlence by selecting "F" for
favorable. "U" for unfavorable, and "None" for no effect (Le., zero variance). Input all amounts as positive values.)
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