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: 7 microns per toy at $0.31 per micron Direct labor: 1.2 hours per toy at $6.60 per hour During July, the company produced 5,300 Maze toys. The toy's production data for the month are as follows: Direct materials. 73,000 microns were purchased at a cost of $0.27 per micron. 26,625 of these microns were still in inventory at the end of the month. Direct labor. 6,860 direct labor-hours were worked at a cost of $49,392. 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 answers to the nearest whole dollar amount.) a. The materials price and quantity variances. b. The labor rate and efficiency variances. 1a. Material price variance Material quantity variance 1b. Labor rate variance Labor efficiency variance
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: 7 microns per toy at $0.31 per micron Direct labor: 1.2 hours per toy at $6.60 per hour During July, the company produced 5,300 Maze toys. The toy's production data for the month are as follows: Direct materials. 73,000 microns were purchased at a cost of $0.27 per micron. 26,625 of these microns were still in inventory at the end of the month. Direct labor. 6,860 direct labor-hours were worked at a cost of $49,392. 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 answers to the nearest whole dollar amount.) a. The materials price and quantity variances. b. The labor rate and efficiency variances. 1a. Material price variance Material quantity variance 1b. Labor rate variance Labor efficiency variance
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 16P: (Appendix) Overhead variances—four variance
Mobile Manufacturing Inc. manufactures a small electric...
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![Exercise 9-17 Direct Materials and Direct Labor Variances [LO9-4, LO9-5]
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: 7 microns per toy at $0.31 per micron
Direct labor: 1.2 hours per toy at $6.60 per hour
During July, the company produced 5,300 Maze toys. The toy's production data for the month are as follows:
Direct materials. 73,000 microns were purchased at a cost of $0.27 per micron. 26,625 of these microns were still in inventory at the
end of the month.
Direct labor. 6,860 direct labor-hours were worked at a cost of $49,392.
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 answers to the nearest whole dollar amount.)
a. The materials price and quantity variances.
b. The labor rate and efficiency variances.
1a. Material price variance
1b.
Material quantity variance
Labor rate variance
Labor efficiency variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd28a980f-17d2-459f-a993-85c19589cc00%2F7e686b47-4025-48ed-89a8-91d0d73651b4%2Fn3ccoy7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 9-17 Direct Materials and Direct Labor Variances [LO9-4, LO9-5]
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: 7 microns per toy at $0.31 per micron
Direct labor: 1.2 hours per toy at $6.60 per hour
During July, the company produced 5,300 Maze toys. The toy's production data for the month are as follows:
Direct materials. 73,000 microns were purchased at a cost of $0.27 per micron. 26,625 of these microns were still in inventory at the
end of the month.
Direct labor. 6,860 direct labor-hours were worked at a cost of $49,392.
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 answers to the nearest whole dollar amount.)
a. The materials price and quantity variances.
b. The labor rate and efficiency variances.
1a. Material price variance
1b.
Material quantity variance
Labor rate variance
Labor efficiency variance
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