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

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.)

The materials price?

and quantity variances?

The labor rate?

efficiency variances?

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:

Explanation / Answer

Material Price Variance Actual Material Quantity X Standard Material price = Standard Cost - Actual Material Quantity X Actual Material Rate = Actual Cost Variance 27625 X 0.34 9392.5 - 27625 X 0.33 9116.25 276.25 Material Quantity Variance Standard Material Price X Standard Material Quantity = Standard Cost - Standard Material Price X Actual material Quanity = Actual Cost Variance 0.34 X 37100 12614 - 0.34 X 27625 9392.5 3221.5 Labor Rate Variance Actual Labor Hours X Standard Labor Rate = Standard Cost - Actual Labor Hours X Actual Labor Rate = Actual Cost Variance 7290 X 6.6 48114 - 7290 X 7.2 52488 -4374 Labor efficiency Variance Standard Labor Rate X Standard Labor Hours = Standard Cost - Standard Labor Rate X Actual Labor Hours = Actual Cost Variance 6.6 X 6890 45474 - 6.6 X 7290 48114 -2640 Material Price Variance 276.25 F Material Quantity Variance 3221.5 F Labor Rate Variance 4374 U Labor efficiency Variance 2640 U

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