Question
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labour standards for one unit of Zoom are given below:
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labour standards for one unit of Zoom are given below:
Standard quantity or hours | Standard price or rate | Standard cost | ||||||
Direct materials | 4.1 | kilos | 3.50 | per kilo | 14.35 | |||
Direct labour | 0.3 | hours | 7.00 | per hour | 2.10 | |||
During the most recent month, the following activity was recorded: 1. 30,000 kilos of material were purchased at a cost of 3.44 per kilo. 2. Huron Company produced 5,000 units of Zoom, using 27,000 kilos of material in the production process. (The rest of the material purchased remained in inventories.) 3. A total of 10,500 hours of direct labour time was recorded at a total labour cost of 86,100.
Task 1: Compute the direct materials price variance for the month.
Task 2: Compute the direct materials quantity variance for the month.
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