A company produces a 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 $ 2.90 per pound $ 20.88 Direct labor 0.50 hours $ 10.00 per hour $ 5.00 During the most recent month, the following activity was recorded: 16,900.00 pounds of material were purchased at a cost of $2.60 per pound. All of the material purchased was used to produce 2,000 units of Zoom. 800 hours of direct labor time were recorded at a total labor cost of $8,800. Required: Compute the materials price and quantity variances for the month. Compute the labor rate and efficiency variances for the month.
A company produces a 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 $ 2.90 per pound $ 20.88 Direct labor 0.50 hours $ 10.00 per hour $ 5.00 During the most recent month, the following activity was recorded: 16,900.00 pounds of material were purchased at a cost of $2.60 per pound. All of the material purchased was used to produce 2,000 units of Zoom. 800 hours of direct labor time were recorded at a total labor cost of $8,800. Required: Compute the materials price and quantity variances for the month. Compute the labor rate and efficiency variances for the month.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A company produces a 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 | ||||
|---|---|---|---|---|---|
| Direct materials | 7.20 | pounds | $ 2.90 | per pound | $ 20.88 |
| Direct labor | 0.50 | hours | $ 10.00 | per hour | $ 5.00 |
During the most recent month, the following activity was recorded:
- 16,900.00 pounds of material were purchased at a cost of $2.60 per pound.
- All of the material purchased was used to produce 2,000 units of Zoom.
- 800 hours of direct labor time were recorded at a total labor cost of $8,800.
Required:
- Compute the materials price and quantity variances for the month.
- Compute the labor rate and efficiency variances for the month.
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