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EXERCISE 9-17 Direct Materials and Direct Labor Variances L09,4 2,109-52 Dawson Toys, Ltd., produces a toy called the Maze The company has recently created a
EXERCISE 9-17 Direct Materials and Direct Labor Variances L09,4 2,109-52 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: 6 microns per toy at $150 per micron Direct lobor: 13 hours per toy at 521 per hour During July, the company produced 3,000 Maze toys. The toy production data for the month are as follows: Direct materials: 25.000 microns were purchased at a cost of $1 48 per micron 5,000 of these microns were still in inventory at the end of the month Direct labor: 4.000 direct labor-bours were worked at a cost of $88,000, Required: 1. Compute the following variances for July . The materials price and quantity variances b. The labor rate and efficiency variances 2. Prepare a brief explanation of the posible causes of each variance
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