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Trudy's Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established
Trudy's 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 $0.50 per micron Direct labor: 1.3 hours per toy at $8 per toy During July, the company produced 3,000 Maze toys. Production data for the month on the toy follow: Direct materials: 25,000 microns were purchased at a cost of $0.48 per micron. 5,000 of these microns wer still in inventory at the end of the month. Direct labor: 4,000 direct labor hours were worked at a cost of $36,000. Required: For July, what is the: (a) labor rate variance? (b) labor efficiency variance? (c) total labor variance
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