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:

	Standard Quantity or Hours		Standard Price or Rate			Standard Cost
Direct materials	7.20	pounds	$	2.00	per pound	$	14.40
Direct labor	0.35	hours	$	5.50	per hour	$	1.93

During the most recent month, the following activity was recorded:

1. 21,000.00 pounds of material were purchased at a cost of $1.70 per pound.

2. All of the material purchased was used to produce 2,500 units of Zoom.

3. 725 hours of direct labor time were recorded at a total labor cost of $5,438.

Required:

1. Compute the materials price and quantity variances for the month.

2. Compute the labor rate and efficiency variances for the month.

Answer 1