Refer to the data in E12-3. Assume that instead of producing 4,000 units during the month, the company produced only 3,000 units, using 14,750 kilos of material in the production process. (The rest of the material purchased remained in inventories.)

Data from E12-3

Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labour standards for one unit of Zoom are given below:

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

• Twenty thousand kilos of material were purchased at a cost of £2.35 per kilo.
• All of the material purchased was used to produce 4,000 units of Zoom.
• A total of 750 hours of direct labour time was recorded at a total labour cost of £10,425.

Required

Compute the direct materials price and quantity variances for the month.

Transcribed Image Text:

Direct materials Direct labour Standard quantity or hours 4.6 kilos 0.2 hours Standard price or rate 2.50 per kilo 12.00 per hour Standard cost 11.50 2.40