>. xMyOTC-Ozarks Te xMyOTC Home : Mail-s712695@st ?? Welcome, Denae- x-Cl M McGr

Question

>. xMyOTC-Ozarks Te xMyOTC Home : Mail-s712695@st ?? Welcome, Denae- x-Cl M McGraw Hill Conne xCo ttps// education.com/flow/co html a toy called the Maze. The company has recenty 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 $0.31 per micron Direct labor: 11 hours per toy at $7.20 per hour During July, the company produced 5,000 Maze toys. The toy's production data for the month are as follows Direct materials 70,000 microns were purchased at a cost of $0 27 per micron. 32.500 of these microns were still in inventory at the end of the month. Direct labor 5,800 direct labor-hours were worked at a cost of $45.820 Required . 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

Explanation / Answer

Q1. Std material quantity allowed for actual output (5000*6): 30000 units Std pricec per unit: $ 0.31 per unit Actual quantity purchased: 70000 units Actual quantity used (70000-32500): 37500 units Actual price per unit: $ 0.27 per unit Material Price variance: Actual Qty purchased (Std price-Actual price) 70000 (031-0.27) = $ 2800 favorable Material Quantity Variance: Std price (Std quantity-Actual quantity used) 0.31 (30000-37500)= $ 2325 Unfavorable Std labour hours for actual output: (5000*1.1): 5500 hours Std labour rate per hour: 7.20 per hour Actual labour hours used: 5800 hours Actual rate per hour (45820/5800): 7.90 per hour Labour rate variance: Actual labour hours (Std rate-Actual rate) 5800 (7.20-7.90) = $ 4060 unfav Labour efficiency variance: Std rate (Std hours-Actual hours) 7.20 (5500-5800)= $ 2160 Unfav

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