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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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.

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