Question
Dawson Toys, Limited, produces a toy called the Maze. The company has recently created a standard cost system to help control costs and has established
Dawson Toys, Limited, 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: 7 microns per toy at $0.31 per micron
Direct labor: 1.3 hours per toy at $6.80 per hour
During July, the company produced 5,200 Maze toys. The toy's production data for the month are as follows:
Direct materials: 77,000 microns were purchased at a cost of $0.30 per micron. 31,500 of these microns were still in inventory at the end of the month.
Direct labor: 7,260 direct labor-hours were worked at a cost of $52,272.
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.
1a. Material price variance 1a. Material quantity variance 1b. Labor rate variance 1b. Labor efficiency variance
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started