At the beginning of April, Winslow Toy Company budgeted 14,000 toy action figures to be manufactured in April at standard direct materials and direct labor costs as follows: Line Item Description Amount Direct materials $14,000 Direct labor 7,840 Total $21,840 The standard materials price is $0.40 per pound. The standard direct labor rate is $14.00 per hour. At the end of April, the actual direct materials and direct labor costs were as follows: Line Item Description Amount Actual direct materials $12,900 Actual direct labor 7,200 Total $20,100 There were no direct materials price or direct labor rate variances for April. In addition, assume no changes in the direct materials inventory balances in April. Winslow Toy Company actually produced 12,500 units during April. Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places and round your answers to the nearest dollar, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Line Item Description Amount Variance Direct materials quantity variance $fill in the blank 1 Direct labor time variance $fill in the blank 3
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.
At the beginning of April, Winslow Toy Company budgeted 14,000 toy action figures to be manufactured in April at standard direct materials and direct labor costs as follows:
| Line Item Description | Amount |
|---|---|
| Direct materials | $14,000 |
| Direct labor | 7,840 |
| Total | $21,840 |
The standard materials price is $0.40 per pound. The standard direct labor rate is $14.00 per hour. At the end of April, the actual direct materials and direct labor costs were as follows:
| Line Item Description | Amount |
|---|---|
| Actual direct materials | $12,900 |
| Actual direct labor | 7,200 |
| Total | $20,100 |
There were no direct materials price or direct labor rate variances for April. In addition, assume no changes in the direct materials inventory balances in April. Winslow Toy Company actually produced 12,500 units during April.
Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places and round your answers to the nearest dollar, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Line Item Description | Amount | Variance |
|---|---|---|
| Direct materials quantity variance | $fill in the blank 1 |
|
| Direct labor time variance | $fill in the blank 3 |
|
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