Question
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labour standards for one unit of Zoom follow: Standard Quantity
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labour standards for one unit of Zoom follow:
Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 4.10 kilograms $ 1.90 per kilogram $ 7.79 Direct labour 0.42 hour $ 9.00 per hour 3.78 Variable overhead 0.42 hour $ 1.50 per hour 0.63
The budgeted fixed overhead cost is $15,012 per month. The denominator activity level of the allocation base is 1,554 direct labour-hours.
During the most recent month, the following activity was recorded:
a. 10,800 kilograms of material were purchased at a cost of $2.18 per kilogram.
b. All of the material purchased was used to produce 3,700 units of Zoom.
c. A total of 810 hours of direct labour time was recorded at a total labour cost of 9,396.
d. The variable overhead cost was $1,620, and the fixed overhead cost was $30,878.
1. Compute the direct materials price and quantity variances.
2. Compute the direct labour rate and efficiency variances.
3. Compute the variable overhead spending and efficiency variances.
4. Compute the fixed overhead budget and the volume variances.
5. Compute the underapplied or overapplied overhead.
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