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).)

Direct labor: 6,500 direct labor-hours were worked at a cost of $50,050.

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 = (0.34-0.33)72000 = 720 F

Material quantity variance = (5000*6-37500)0.34 = 2550 U

Labour rate variance = (7.4*6500-50050) = 1950 U

Labour efficiency variance = (5000*1.2-6500)7.4 = 3700 U

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