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Exercise 8-17 Material and Labor Variances [LO4, LO5] Topper Toys has developed a new toy called the Brainbuster. The company has a standard cost system
Exercise 8-17 Material and Labor Variances [LO4, LO5]
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: 7 diodes per toy at $0.34 per diode | |
Direct labor: 1.3 hours per toy at $7.10 per hour |
During August, the company produced 5,400 Brainbuster toys. Production data on the toy for August follow: |
Direct materials: 75,000 diodes were purchased at a cost of $0.33 per diode. 27,750 of these diodes were still in inventory at the end of the month. |
Direct labor: 7,620 direct labor-hours were worked at a cost of $58,674. |
Required: | |
1. | Compute the following variances for August: (Input all amounts as positive values. Do not round your per unit rates, round other intermediate calculations and your final answer to nearest whole dollar. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) |
a. | Direct materials quantity and price variances. |
Material quantity variance | $ | (Click to select)FNoneU |
Material price variance | $ | (Click to select)FUNone |
b. | Direct labor efficiency and rate variances. |
Labor efficiency variance | $ | (Click to select)FUNone |
Labor rate variance | $ | (Click to select)FUNone |
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