Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labour standards for one unit of Zoom follow: Standard Quantityor HoursStandard Priceor RateStandardCost Direct materials4.00 kilograms$1.90 per kilogram$ 7.60 Direct labour0.40 hour$12.00 per hour4.80 Variable overhead0.40 hour$2.00 per hour0.80 The budgeted fixed overhead cost is $14,615 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.9,500 kilograms of material were purchased at a cost of $2.21 per kilogram.b.A total of 850 hours of direct labour time was recorded at a total labour cost of $9,190.c.The variable overhead cost was $1,580, and the fixed overhead cost was $14,704. Assume that the company produced 1,300 units during the month, using 6,600 kilograms of material in the production process. (The rest of the material purchased remained in inventory.)Required:1.Compute the direct 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).)
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