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: (Do not round intermediate calculations. Round final answer to the nearest whole dollar. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Explanation / Answer

Standard Cost Sheet PU A Material Price Variance: Component Qty Rate Price (Standard Price-Actual Price)Actual Qty Consumed Direct Material 7 0.32 2.24 (0.32-0.29)*40250 Direct Labor 1.1 6.80 7.48 1207.5 F 9.72 A1 Material Usage Variance: (Standard Qty-Actual Qty consumed)Standard Price Actual Cost (32200-40250)*0.32 Component Qty Rate Price -2576 UF Direct Material 40250 0.29 11673 B Labor Price Variance: Direct Labor 5460 7.40 40404 (Standard Price-Actual Price)Actual Hours Total 52077 (6.80-7.40)*5460 -3276 UF Revised Standard Cost for Actuals (4600) B1 Labor Eff Variance: Component Qty Rate Price (Standard Hours-Actual Hours)Standard Price Direct Material 32200 0.32 10304 (5060-5460)*6.80 Direct Labor 5060 6.80 34408 -2720 UF Total 44712 Material Purchases 73000 Less: Closing Stock 32750 Net Consumed 40250

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