Exercise 10-6 (Algo) Direct Materials and Direct Labor Variances [LO10-1, LO10-2] 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. Direct materials Direct labor Standard Quantity or Standard Price or Rate $ 2.20 per pound $ 7.00 per hour Standard Cost $ 15.40 $ 3.15 Hours 7.00 pounds 0.45 hours During the most recent month, the following activity was recorded: a. 19,500.00 pounds of material were purchased at a cost of $2.10 per pound. b. All of the material purchased was used to produce 2,500 units of Zoom. c. 1,025 hours of direct labor time were recorded at a total labor cost of $9,225. 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 unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations to the nearest whole dollar.) 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 8E: Standard cost summary; materials and labor cost variances Perkins Processors Inc. produces an...
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Exercise 10-6 (Algo) Direct Materials and Direct Labor Variances [LO10-1, LO10-2]
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.
Direct materials
Direct labor
Standard Quantity or
Standard Price or Rate
$ 2.20 per pound
$ 7.00 per hour
Standard Cost
$ 15.40
$ 3.15
Hours
7.00 pounds
0.45 hours
During the most recent month, the following activity was recorded:
a. 19,500.00 pounds of material were purchased at a cost of $2.10 per pound.
b. All of the material purchased was used to produce 2,500 units of Zoom.
c. 1,025 hours of direct labor time were recorded at a total labor cost of $9,225.
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 unfavorable, and
"None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations to
the nearest whole dollar.)
1. Materials price variance
1. Materials quantity variance
2. Labor rate variance
2. Labor efficiency variance
Transcribed Image Text:Exercise 10-6 (Algo) Direct Materials and Direct Labor Variances [LO10-1, LO10-2] 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. Direct materials Direct labor Standard Quantity or Standard Price or Rate $ 2.20 per pound $ 7.00 per hour Standard Cost $ 15.40 $ 3.15 Hours 7.00 pounds 0.45 hours During the most recent month, the following activity was recorded: a. 19,500.00 pounds of material were purchased at a cost of $2.10 per pound. b. All of the material purchased was used to produce 2,500 units of Zoom. c. 1,025 hours of direct labor time were recorded at a total labor cost of $9,225. 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 unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations to the nearest whole dollar.) 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance
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