Answered: Huron Company produces a commercial…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 20E: Jameson Company produces paper towels. The company has established the following direct materials...

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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 Cost
Direct materials ........... 4.6 pounds $2.50 per pound $11.50
Direct labor ................. 0.2 hours $12.00 per hour $2.40
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 labor time were recorded at a total labor cost of $10,425.
Required:
1. Compute the direct materials price and quantity variances for the month.
2. Compute the direct labor rate and efficiency variances for the month.

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