1. Topper Toys has developed a new toy called the Brainbuster. The company has a standard cost system to help control costs and has established the following standards for the Brainbuster toy:

Direct materials: 9 pieces per toy at $0.30 per piece Direct labor: 1.1 hours per toy at $7 per hour

During the month of August, the company produced 5,000 Brainbuster toys. Production data for the month on the toy follow:

Direct materials: 50,000 pieces were purchased for use in production at a cost of $0.28 per piece. Direct labor: 6,400 direct labor-hours were worked at a cost of $48,000.

Required: 1. Compute the following variances for the month a. Direct materials price and quantity variances. b. Direct labor price and quantity variances. 2. Prepare a brief explanation of the significance and possible causes of each variance.

2. The Worldwide Credit Card Company uses standards to control the labor time involved in opening mail from card holders and recording the enclosed remittances. Incoming mail is gathered into batches, and a standard time is set of opening and recording each batch. The labor standards relating to one batch are given below:

	Standard Hours	Standard Rate	Standard Cost
Per batch	2.5	$6	$15

The record showing the time spend last week in opening batches of mail has been misplaced. However, the batch supervisor recalls that 160 batches were received and opened during the week, and the controller recalls the following variance data relating to these batches:

Total labor variance................$735 Unfavorable Labor price variance.................$165 Favorable

Required: 1. Determine the number of actual labor-hours spent opening batches during the week. 2. Determine the actual hourly rate paid to employees for opening batches last week. (Hint: A useful way to proceed would be to work from known to unknown data using the columnar format shown in the additional reading material for this chapter.)