Dawson Toys, Limited, produces a toy called the Maze with the following standards:Direct materials: 6 microns per toy at $0.34 per micronDirect labor: 1.1 hours per toy at $7.30 per hourDuring July, the company produced 5,300 Maze toys. The toy's production data for the month are as follows:Direct materials.: 77,000 microns were purchased at a cost of $0.32 per micron. 37,250 of these microns were still in inventory at theend of the month.Direct labor: 6,330 direct labor-hours were worked at a cost of $49,374.Required:1. Compute the following variances for July:Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zerovariance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest wholedollar amount.a. The materials price and quantity variances.b. The labor rate and efficiency variances.1a. Material price variance1a. Material quantity variance1b. Labor rate variance1b. Labor efficiency variance$1,540 FUUF

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Description: Dawson Toys, Limited, produces a toy called the Maze with the following standards:Direct materials: 6 microns per toy at $0.34 per micronDirect labor: 1.1 hours per toy at $7.30 per hourDuring July, the company produced 5,300 Maze toys. The toy's pr

Material Price Variance: The difference between the actual price paid for materials and the standard…

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1a. Material price variance 1a. Material quantity variance 1b. Labor rate variance 1b. Labor efficiency variance $ 1,540 F U F

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

Dawson Toys, Limited, produces a toy called the Maze with the following standards:
Direct materials: 6 microns per toy at $0.34 per micron
Direct labor: 1.1 hours per toy at $7.30 per hour
During July, the company produced 5,300 Maze toys. The toy's production data for the month are as follows:
Direct materials.: 77,000 microns were purchased at a cost of $0.32 per micron. 37,250 of these microns were still in inventory at the
end of the month.
Direct labor: 6,330 direct labor-hours were worked at a cost of $49,374.
Required:
1. Compute the following variances for July:
Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero
variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole
dollar amount.
a. The materials price and quantity variances.
b. The labor rate and efficiency variances.
1a. Material price variance
1a. Material quantity variance
1b. Labor rate variance
1b. Labor efficiency variance
$
1,540 F
U
U
F

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At the beginning of the year, you estimated the following - Production - 75,000 units Raw Material - 270,000 pounds at a cost of $1,026,000 Direct Labor - 187,500 hours at a cost of $4,125,000 Variable Overhead - 135,000 machine hours at a cost of $567,000 Fixed Overhead - $900,000 At the end of year, the actual results were as follows - Production - 73,000 units Raw Material - 265,720 pounds purchased and used at a cost of $1,036,308 Direct Labor - 179,580 hours at a cost of $3,968,718 Variable Overhead - 133,590 machine hours at a cost of $558,406.20 Fixed Overhead - $891,000
Gross profit volume variance is derived by A. combining sales and cost of sales variances. B. combining sales volume and cost volume variances. C. deducting cost price variance from gross profit variance. D. deducting sales price variance from gross profit variance.
Least-squares regression is a statistical method for identifying cost behavior. True or False True
At the beginning of the year, you estimated the following - Production - 75,000 units Raw Material - 270,000 pounds at a cost of $1,026,000 Direct Labor - 187,500 hours at a cost of $4,125,000 Variable Overhead - 135,000 machine hours at a cost of $567,000 Fixed Overhead - $900,000 At the end of year, the actual results were as follows - Production - 73,000 units Raw Material - 265,720 pounds purchased and used at a cost of $1,036,308 Direct Labor - 179,580 hours at a cost of $3,968,718 Variable Overhead - 133,590 machine hours at a cost of $558,406.20 Fixed Overhead - $891,000
The variance that highlights the difference between actual sales volume and the master budget sales volume is the sales activity variance. O flexible budget variance. O master budget variance. O MOH volume variance.