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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.
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