In: Accounting
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 | 6.2 | pounds | $ | 3.00 | per pound | $ | 18.60 |
Direct labor | 0.4 | hours | $ | 10.00 | per hour | $ | 4.00 |
During the most recent month, the following activity was recorded: |
a. | Twelve thousand pounds of material were purchased at a cost of $2.90 per pound. |
b. |
The company produced only 1,200 units, using 10,800 pounds of material. (The rest of the material purchased remained in raw materials inventory.) |
c. | Five hundred and eighty hours of direct labor time were recorded at a total labor cost of $6,960. |