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: Direct materials: 8 microns per toy at $0.35 per micron Direct labor: 1.1 hours per toy at $7.40 per hour During July, the company produced 5,400 Maze toys. The toy's production data for the month are as follows: Direct materials: 76,000 microns were purchased at a cost of $0.31 per micron. 22,000 of these microns were still in inventory at the end of the month. Direct labor: 6,440 direct labor-hours were worked at a cost of $50,876. Required: 1. Compute the following variances for July a. The materials price and quantity variances.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a
Direct materials: 8 microns per toy at $0.35 per micron
Direct labor: 1.1 hours per toy at $7.40 per hour
During July, the company produced 5,400 Maze toys. The toy's production data for the month are as follows:
Direct materials: 76,000 microns were purchased at a cost of $0.31 per micron. 22,000 of these microns were still in inventory at the end of the month.
Direct labor: 6,440 direct labor-hours were worked at a cost of $50,876.
Required:
1. Compute the following variances for July
a. The materials price and quantity variances.
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