Dawson Toys, Ltd, produces a toy called the Maze. The company has recently estab

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 the following standards for the Maze toy Direct materials: 8 microns per toy at $0.33 per micron Direct labor: 11 hours per toy at $7.30 per hour During July, the company produced 5,100 Maze toys. The toy's production data for the month are as follows: ed were purchased at a cost of S0.29 per micron. 29,000 of these microns were stll in inventory at the end of the month. Direct labor. 6,010 direct labor-hours were worked at a cost of $47,479 nces Required 1. Compute the foll and "None" final answer to the nearest whole dollar amount.) a. The materials price and quantity variances. b. The labor rate and efficiency variances. for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round 1a. 1b Froy 10f 3ll? Next > o%

Explanation / Answer

1a. Material Price Variance $    2,040 F Material Quantity Variance $    3,366 U Working: a. Material Price Variance = (Standard Price-Actual Price)*Actual Material quantity used = (0.33-0.29)*51000 = $         2,040 F Materials purchased           80,000 Less:Materials in inventory           29,000 Materials used           51,000 b. Material Quantity Variance = (Standard Quantity-Actual Quantity)*Standard Price = (40800-51000)*0.33 = $         3,366 U Standard Quantity = actual output *Standard material quantity per unit = 5100*8 =           40,800 1b. Labor rate variance $    3,606 U Labor efficiency variance $    2,920 U Working: a. Labor rate variance = (Standard rate-Actual rate)*Actual labor hours = (7.30-7.90)*6010 = $         3,606 U Actual labor rate = $       47,479 / 6010 = $            7.90 b. Labor efficiency variance = (Standard labor hours-Actual labor hours)*Standard labor rate = (5610-6010)*7.30 = $         2,920 U Working: Standard Labor hours = Actual output*Standard Labor hour per unit = 5100*1.1 = 5610

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