Dawson Toys, Ltd., produces a toy called the Maze. The company has recently esta
ID: 2450197 • Letter: D
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:
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). Do not round intermediate calculations. Round final answer to the nearest whole dollar.)
a. The materials price and quantity variances.
Direct materials: 6 microns per toy at $0.30 per micron Direct labor: 1.3 hours per toy at $6.70 per hourExplanation / Answer
Variance Formula Formula Amount Sign Material Price Variance Actual Quantity of material purchased *(AR-SR) 76000*(.28-.30) 1520 F Material Quantity Variance (Actual Quantiy-Std Qty of RM for actual Output)*SR ((76000-36250)-(5300*6))*0.3 2385 UF Labor Rate variance Actual Labor hours * Actual Rate-Actual Labor hours * Std Rate (52488-7290*6.7) 3645 UF Labor Efficiency variance (Actual Labor hours -Std Labour hour required for actual output)*SR (7290-(5300*1.3)*6.7 2680 UF
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