Dawson Toys, Ltd., produces a toy called the Maze. The company has recently esta
ID: 2547662 • 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.)
Direct materials: 7 microns per toy at $0.33 per micron Direct labor: 1.5 hours per toy at $6.90 per hour
Explanation / Answer
a Materials price variance=78000*(0.32-0.33)= $780 F Materials quantity variance=0.33*(45500-5200*7)= $3003 U b Labor rate variance=61420-(8300*6.9)= $4150 U Labor efficiency variance=6.9*(8300-5200*1.5)= $3450 U
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