Question
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:
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 | 7.80 | pounds | $ 2.30 | per pound | $ 17.94 |
Direct labor | 0.30 | hours | $ 8.00 | per hour | $ 2.40 |
During the most recent month, the following activity was recorded:
Twenty five thousand nine hundred pounds of material were purchased at a cost of $2.10 per pound.
All of the material purchased was used to produce 3,000 units of Zoom.
700 hours of direct labor time were recorded at a total labor cost of $6,300.
Required:
1. Compute the materials price and quantity variances for the month.
2. Compute the labor rate and efficiency variances for the month.
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