Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 0.50 hour $ 12.00 per hour 6.00
Variable overhead 0.50 hour $ 2.00 per hour 1.00

The budgeted fixed overhead cost is $15,012 per month. The denominator activity level of the allocation base is 800 direct labour-hours.

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

  1. 9,800 kilograms of material were purchased at a cost of $2.18 per kilogram.
  2. A total of 850 hours of direct labour time was recorded at a total labour cost of $9,300.
  3. The variable overhead cost was $1,620, and the fixed overhead cost was $15,101.

Assume that the company produced 1,300 units, using 6,400 kilograms of material in the production process. (The rest of the material purchased remained in inventory.)

Required:

1. Compute the direct materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

image text in transcribed

Materials price variance Materials quantity variance

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Risk Management In Organisations An Integrated Case Study Approach

Authors: Margaret Woods

2nd Edition

1138632333, 9781138632332

More Books

Students also viewed these Accounting questions

Question

Discuss the use of third-wave therapies in psychotherapy practice.

Answered: 1 week ago

Question

=+3. Who are the brand's competitors?

Answered: 1 week ago

Question

11.7 Discuss competency-based pay.

Answered: 1 week ago