Accounting
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently created a standard cost system to help control costs and has established the following standards for the Maze toy: Direct materials: 8 microns per toy at $0.32 per micron Direct labor: 1.4 hours per toy at $7.30 per hour During July, the company produced 5,400 Maze toys. The toy's production data for the month are as follows: Direct materials: 73,000 microns were purchased at a cost of $0.30 per micron. 19,000 of these microns were still in inventory at the end of the month. Direct labor: 8,060 direct Ia borhours were worked at a cost of $62,062. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount.) a. The materials price and quantity variances. b. The labor rate and efficiency variances. a Material price variance E - Saratoga Company manufactures jobs to customer specifications. The company is conducting a timedriven activitybased costing study in its Purchasing Department to better understand how Purchasing Department labor costs are consumed by individualjobs. To aid the study, the company provided the following data regarding its Purchasing Department and three of its many jobs: Number of employees 14 Average salary per employee 53 26,000 Weeks of employment per year 52 Hours worked per week 40 Practical capacity percentage 85% Requisition Bid Processing Evaluation Inspection Minutes per unit of the activity '15 45 30 Job X Job Y Job Z Number of requisitions processed 8 5 4 Number of bid evaluations 2 i 3 Number of inspections 5 i 5 Now assume that Saratoga Company would like to answer the following \"what if\" question using its timedriven activitybased costing system: Assuming our estimated activity demands for alljobs in the next period will be as shown below, how will this affect ourjob costs and our stafng levels within the Purchasing Department? Requisition Bid Processing Evaluation Inspection Activity demands for alljobs 8,500 11,250 1 1,900 Required: 1. Will the revised activity demands affect the total Purchasing Department labor costs assigned to Job X, Job Y, and Job 2? 2. Using the revised activity demands, calculate Saratoga's used capacity in minutes. 3. Using the revised activity demands, calculate Saratoga's unused capacity in minutes. 4. Using the revised activity demands, calculate Saratoga's unused capacity in number of employees. (Round your answer to 2 decimal places.) 5. Based on the revised activity demands, calculate the impact on expenses of matching capacity with demand. (Be sure to round down your potential adjustment in the number of employees to a whole number. Negative amount should be indicated by a minus sign.) Revised activity demands affect total Purchasing Department labor costs assigned to Jobs X, Y and Z? Used capacity in minutes Unused capacity in minutes Unused capacity in number of employees WPS'VNT' Impact on expenses of matching capacity with demand
