Question

a 14 book

Huron Company produces a commercial cleaning compound know as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below

Standard Quality of Hours    Standard Price or rate Standard Cost

Direct Materials    4.6 Pounds    $2.50 Per Pound $11.50

Diret Labor    0.2 Hours $18.00 Per Hour $3.60

During the recent month, the following activity was recorded

a. Twenty thousand pounds of material were purchased at a cost of $2.35 per pound

b. All of the material purchased was used to produce 4,000 units of zoom

c. 750 hours of direct labor time were recorded at a total labor cost of $14,925

Required

1.Compute the materials price and quantity variances for the month.

2.Compute the labor rate and efficiency variances for the month.

Answer 1

Material price variance = (standard price-actual price)actual quantity

= (2.50-2.35)20000

Material price variance = 3000 F

Material quantity variance = (Standard quantity-actual quantity)standard price

= (4.6*4000-20000)*2.5

Material quantity variance = 4000 U

Labou rate variance = (Standard rate-actual rate)actual hours

= (18*750-14925)

Labour rate variance = 1425 U

Labour efficiency variance = (Standard hour-actual hour)standard price

= (4000*.2-750)18

Labour efficiency variane = 900 F