Dawson Toys, Limited, produces a toy called the Maze. The company has recently created a standard c and has established the following standards for the Maze toy: Direct materials: 7 microns per toy at $0.34 per micron Direct labor: 1.4 hours per toy at $6.80 per hour During July, the company produced 5,300 Maze toys. The toy's production data for the month are as foll Direct materials: 78,000 microns were purchased at a cost of $0.30 per micron. 31,625 of these microns end of the month. Direct labor. 8,020 direct labor-hours were worked at a cost of $57,744. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for fa and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round inter 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 $ 3,120 $ 4,080
Dawson Toys, Limited, produces a toy called the Maze. The company has recently created a standard c and has established the following standards for the Maze toy: Direct materials: 7 microns per toy at $0.34 per micron Direct labor: 1.4 hours per toy at $6.80 per hour During July, the company produced 5,300 Maze toys. The toy's production data for the month are as foll Direct materials: 78,000 microns were purchased at a cost of $0.30 per micron. 31,625 of these microns end of the month. Direct labor. 8,020 direct labor-hours were worked at a cost of $57,744. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for fa and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round inter 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 $ 3,120 $ 4,080
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Dawson Toys, Limited, produces a toy called the Maze. The company has recently created a standard cost system to help control costs
and has established the following standards for the Maze toy:
Direct materials: 7 microns per toy at $0.34 per micron
Direct labor: 1.4 hours per toy at $6.80 per hour
During July, the company produced 5,300 Maze toys. The toy's production data for the month are as follows:
Direct materials: 78,000 microns were purchased at a cost of $0.30 per micron. 31,625 of these microns were still in inventory at the
end of the month.
Direct labor: 8,020 direct labor-hours were worked at a cost of $57,744.
Required:
1. 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). 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 i
$ 3,120
$ 4,080
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