Direct materials: 6 microns per toy at $0.34 per micron Direct labor: 1.4 hours per toy at $7.30 per hour During July, the company produced 4,800 Maze toys. The toy's production data for the month are as follows: Direct materials. 74,000 microns were purchased at a cost of $0.31 per micron. 38,000 of these microns were still in inventory at the end of the month. Direct labor. 7,120 direct labor-hours were worked at a cost of $56,960.
Direct materials: 6 microns per toy at $0.34 per micron Direct labor: 1.4 hours per toy at $7.30 per hour During July, the company produced 4,800 Maze toys. The toy's production data for the month are as follows: Direct materials. 74,000 microns were purchased at a cost of $0.31 per micron. 38,000 of these microns were still in inventory at the end of the month. Direct labor. 7,120 direct labor-hours were worked at a cost of $56,960.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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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: 6 microns per toy at $0.34 per micron
Direct labor: 1.4 hours per toy at $7.30 per hour
During July, the company produced 4,800 Maze toys. The toy's production data for the month are as follows:
Direct materials. 74,000 microns were purchased at a cost of $0.31 per micron. 38,000 of these microns were still in inventory at the
end of the month.
Direct labor. 7,120 direct labor-hours were worked at a cost of $56,960.
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
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