ACC 349 Week 5 Assignment Help 3

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

7.0

 pounds

$

3.00

 per pound

$

21.00     

  Direct labor

0.4

 hours

$

14.00

 per hour

$

5.60     

During the most recent month, the following activity was recorded:

a.

Thirteen thousand six hundred pounds of material were purchased at a cost of $2.90 per pound.

b.

The company produced only 1,360 units, using 12,240 pounds of material. (The rest of the material purchased remained in raw materials inventory.)

c.

Six hundred and forty four hours of direct labor time were recorded at a total labor cost of $7,728.

Required:

Compute the materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round intermediate calculations.)

SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 4,000 of these meals using 750 direct labor-hours. The company paid these direct labor workers a total of $6,000 for this work, or $8.00 per hour.

     According to the standard cost card for this meal, it should require 0.20 direct labor-hours at a cost of $7.00 per hour.

Required:

(1)   According to the standards, what direct labor cost should have been incurred to prepare 4,000 meals? How much does this differ from the actual direct labor cost? (Round labor-hours per meal and labor cost per hour to 2 decimal places.)

    (2   Break down the difference computed in (1) above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

   Question 3.

     Question  4.

 2. Break down the difference computed in (1) above into a variable overhead rate variance and a variable overhead efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

   Question 5.

A direct materials quantity standard generally includes an allowance for waste.

True

False