Dawson Toys, Ltd., 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: 8 microns per toy at $0.35 per micron Direct labor: 1.5 hours per toy at $6.60 per hour During July, the company produced 5,000 Maze toys. The toy's production data for the month are as follows: Direct materials: 73,000 microns were purchased at a cost of $0.34 per micron. 23,000 of these microns were still in inventory at the end of the month. Direct labor. 7,900 direct labor-hours were worked at a cost of $56,090. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount.) a. The materials price and quantity variances. b. The labor rate and efficiency variances. Answer is complete but not entirely correct. Material price 1a. 2$ 4,100 x F variance Material quantity variance $ 1,900 X U 1b. Labor rate variance 2$ 1,600 XU Labor efficiency variance 1,300 X F 2$
Dawson Toys, Ltd., 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: 8 microns per toy at $0.35 per micron Direct labor: 1.5 hours per toy at $6.60 per hour During July, the company produced 5,000 Maze toys. The toy's production data for the month are as follows: Direct materials: 73,000 microns were purchased at a cost of $0.34 per micron. 23,000 of these microns were still in inventory at the end of the month. Direct labor. 7,900 direct labor-hours were worked at a cost of $56,090. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount.) a. The materials price and quantity variances. b. The labor rate and efficiency variances. Answer is complete but not entirely correct. Material price 1a. 2$ 4,100 x F variance Material quantity variance $ 1,900 X U 1b. Labor rate variance 2$ 1,600 XU Labor efficiency variance 1,300 X F 2$
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please help me correct these that are incorrect. Thanks!
Transcribed Image Text:Dawson Toys, Ltd., 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: 8 microns per toy at $0.35 per micron
Direct labor: 1.5 hours per toy at $6.60 per hour
During July, the company produced 5,000 Maze toys. The toy's production data for the month are as follows:
Direct materials: 73,000 microns were purchased at a cost of $0.34 per micron. 23,000 of these microns were still in inventory at the
end of the month.
Direct labor. 7,900 direct labor-hours were worked at a cost of $56,090.
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.
Answer is complete but not entirely correct.
Material price
1a.
$ 4,100 X F
variance
Material quantity
1,900
U
variance
1b.
Labor rate variance
1,600 X U
Labor efficiency
$ 1,300 XF
variance
%24
%24
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