Exercise 10-6 Direct Materials and Direct Labor Variances [LO10-1, LO10-2]

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
Direct materials	6.90	pounds	$	2.60	per pound	$	17.94
Direct labor	0.30	hours	$	7.00	per hour	$	2.10

During the most recent month, the following activity was recorded:

1. 19,250.00 pounds of material were purchased at a cost of $2.40 per pound.

2. All of the material purchased was used to produce 2,500 units of Zoom.

3. 450 hours of direct labor time were recorded at a total labor cost of $4,500.

Required:

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

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