Question
In: Accounting
The Hornsby company has just started a business producing a cleaning compound ,Cleanfast . The direct...
The Hornsby company has just started a business producing a
cleaning compound ,Cleanfast . The direct materials and direct
labour standards for one unit of Cleanfast are given below:
Standard Quantity/Hours Standard Price/Rate
Direct materials 4.6 pounds $2.40 per pound
Direct labour 0.2 hours $18.00 per hour
During a recent month the following activity was recorded :
(i) Twenty thousand of material were purchased at a cost of $46,400
.
(ii) Nineteen thousand pounds were used to produce 4,000 units of
Cleanfast.
(iii) 750 hours of direct labour time were recorded at a total
labour cost
of $14,925.
Required:
1.Compute the material price and quantity variances for the month
.
2.Compute the labour rate and efficiency variances for the month
.
3. Why has the company calculated standard prices?
4.Provide two reasons for both the Material price variance and the
Labour efficiency variance.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor...
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
6.00
pounds
$
2.30
per pound
$
13.80
Direct
labor
0.50
hours
$
10.00
per hour
$
5.00
During the most recent month, the following activity was
recorded:
11,000.00 pounds of material were purchased at a cost of $2.10
per pound.
All of...
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor...
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
6.40
pounds
$
1.70
per pound
$
10.88
Direct labor
0.40
hours
$
14.00
per hour
$
5.60
During the most recent month, the following activity was
recorded:
Eighteen thousand five hundred pounds of material were purchased
at a cost of $1.40 per...
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor...
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
7.80
pounds
$
2.30
per pound
$
17.94
Direct labor
0.30
hours
$
8.00
per hour
$
2.40
During the most recent month, the following activity was
recorded:
25,900.00 pounds of material were purchased at a cost of $2.10
per pound.
All of...
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor...
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
7.40
pounds
$
2.60
per pound
$
19.24
Direct labor
0.45
hours
$
8.00
per hour
$
3.60
During the most recent month, the following activity was
recorded:
12,100.00 pounds of material were purchased at a cost of $2.50
per pound.
All of...
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor...
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
7.90
pounds
$
2.10
per pound
$
16.59
Direct labor
0.50
hours
$
5.00
per hour
$
2.50
During the most recent month, the following activity was
recorded:
14,850.00 pounds of material were purchased at a cost of $2.00
per pound.
All of...
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor...
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
7.90
pounds
$
2.10
per pound
$
16.59
Direct
labor
0.50
hours
$
5.00
per hour
$
2.50
During the most recent
month, the following activity was recorded:
14,850.00 pounds of
material were purchased at a cost of $2.00 per pound.
All of...
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor...
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:
21,000.00 pounds of material were purchased at a cost of $1.70
per pound.
All of...
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labour...
Huron Company produces a commercial cleaning compound known as
Zoom. The direct materials and direct labour standards for one unit
of Zoom follow: Standard Quantity or Hours Standard Price or Rate
Standard Cost Direct materials 4.40 kilograms $ 2.20 per kilogram $
9.68 Direct labour 0.41 hour $ 11.00 per hour 4.51 Variable
overhead 0.41 hour $ 1.80 per hour 0.74 The budgeted fixed overhead
cost is $15,851 per month. The denominator activity level of the
allocation base is 861...
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor...
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:
21,000.00 pounds of material were purchased at a cost of $1.70
per pound.
All of...
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor...
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
5.40
pounds
$
3.00
per pound
$
16.20
Direct labor
0.40
hours
$
6.00
per hour
$
2.40
During the most recent month, the following activity was
recorded:
Ten thousand four hundred pounds of material were purchased at a
cost of $2.90 per...
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