Question
Dawson toys ltd. produces a toy called the maze. The company has recently established a standard cost system to help control costs and has established
Dawson toys ltd. produces a toy called the maze. The company has recently established a standard cost system to help control costs and has established the following standards for the maze toy:
Direct materials: 6 microns per toy at $0.32 per micron
Direct labor: 1.3 hours per toy at $7.00 per hour
During July, the company produced 5,500 maze toys. The toys production data for the month are as follows:
Direct materials: 78,000 microns were purchased at a cost of $0.29 per micron. 36,750 of these microns were still in inventory at the end of the month.
Direct labor. 7,550 direct labor-hours were worked at a cost of $55,115.
1. a. What is the Material price varience?
b. What is the Material quantity varience?
2. a. What is the Labor rate varience?
b. What is the Labor efficiency varience?
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