Question - Direct Materials and Direct Labor Variances
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
|
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.
Requirement 1: Compute the direct materials price and quantity variances for the month.
Requirement 2: Compute the direct labor rate and efficiency variances for the month.