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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 Quantitiy 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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