Check Huron Company produces a commercial cleaning compound known as Zoom. The d
ID: 2519625 • Letter: C
Question
Check 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 Standard Price Standard or Hours or Rate pound $11.5e $18.00 per hour 3.60 Direct materials 4.6 pounds 2.50 er oints Direct labor 0.2 hours eBook Print References During the most recent month, the following activity was recorded: a. Twenty thousand pounds of material were purchased at a cost of $2.35 per pound. b. All of the material purchased was used to produce 4,000 units of Zoom C. 750 hours of direct labortime were recorded at a total labor cost of S14.925: Required 1. Compute the materials price and quantity variances for the month, 2. Compute the labor rate and efficiency variances for the month. (For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfevorable, and "None for no effect (i.e., zero variance). Input all amounts as positive values.) Next aw reExplanation / Answer
a) Material price variance = (2.50-2.35)*20000 = 3000 F
Material quantity variance = (4000*4.6-20000)*2.5 = 4000 U
b) Labour rate variance = (18*750-14925) = 1425 U
Labour efficiency variance = (4000*.20-750)*18 = 900 F