Direct Materials and Direct Labor Variances At the beginning of June, Kimber Toy Company budgeted 22,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials $53,900 Direct labor 10,560 Total $64,460 The standard materials price is $0.70 per pound. The standard direct labor rate is $12.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials $48,200 Actual direct labor 9,400 Total $57,600 There were no direct materials price or direct labor rate variances for June. In addition, assume no changes in the direct materials inventory balances in June. Kimber Toy Company actually produced 19,100 units during June. Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Direct Materials and Direct Labor Variances
At the beginning of June, Kimber Toy Company budgeted 22,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows:
| Direct materials | $53,900 |
| Direct labor | 10,560 |
| Total | $64,460 |
The standard materials price is $0.70 per pound. The standard direct labor rate is $12.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows:
| Actual direct materials | $48,200 |
| Actual direct labor | 9,400 |
| Total | $57,600 |
There were no direct materials price or direct labor rate variances for June. In addition, assume no changes in the direct materials inventory balances in June. Kimber Toy Company actually produced 19,100 units during June.
Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
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