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

The budgeted fixed overhead cost is $15,800 per month. The denominator activity level of the allocation base is 800 direct labour-hours.

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

a. 9,000 kilograms of material were purchased at a cost of $2.20 per kilogram.

b. All of the material purchased was used to produce 2,000 units of Zoom.

c. A total of 850 hours of direct labour time was recorded at a total labour cost of $9,265.

d. The variable overhead cost was $1,650, and the fixed overhead cost was $15,890.

Required:

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

2. Compute the direct labour rate and efficiency variances for the month.

3. Compute the variable overhead spending and efficiency variances for the month.

4. Compute the fixed overhead budget and the volume variances for the month.

5. Compute the underapplied or overapplied overhead for the month.

Transcribed Image Text:

Standard Quantity or Standard Price or Rate Standard Cost Hours $2 per kilogram $12 per hour $2 per hour Direct materials 4.2 kilograms $8.20 Direct labour 0.4 hour 4.80 Variable overhead 0.4 hour 0.80