apter TO Regular Home 8 Dawson Toys, Ltd, produces a toy called the Maze. The co

Question

apter TO Regular Home 8 Dawson Toys, Ltd, produces a toy called the Maze. The company has recently established asandard cost system to help control costs and has established the ng standards for the Maze toy: Direct materials: 7 microns per toy at $0.33 per micron Direct labor: 1.2 hours per toy at $6.50 per hour 2 During July, the company produced 5,500 Maze toys. The toy's production data for the month are as follows: t materials. 73,000 microns were pu rchased at a cost of $0.30 per micron. 24,875 of these microns were still n inventory at the end of the month. Direct labor. 7000 direct labor-hours were worked at a cost of $48,300 Required 1. Compute the following variances and "None" for no final answer to the nearest whole dollar amount.) a. The materials price and quantity variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable ffect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round b. The labor rate and efficiency variances. 1a. Material price variance Material quantity variance bor rate variance

Explanation / Answer

1) Material price variance = (0.33-0.30)*73000 = 2190 F

Material quantity variance = (5500*7-48125)*0.33 = 3176 U

2) Labour price variance = (6.5*7000-48300) = 2800 U

Labour efficiency variance = (5500*1.2-7000)*6.5 = 2600 U

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