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: 7 microns per toy at $0.34 per micron Direct labor: 1.4 hours per toy at $7.20 per hour During July, the company produced 4,700 Maze toys. The toy's production data for the month are as follows Direct materials: 75,000 microns were purchased at a cost of $0.33 per micron: 33,875 of these microns were still in inventory at the end of the month Direct labor: 7180 direct labor-hours were worked at a cost of $55,286 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 (.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
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: 7 microns per toy at $0.34 per micron Direct labor: 1.4 hours per toy at $7.20 per hour During July, the company produced 4,700 Maze toys. The toy's production data for the month are as follows Direct materials: 75,000 microns were purchased at a cost of $0.33 per micron: 33,875 of these microns were still in inventory at the end of the month Direct labor: 7180 direct labor-hours were worked at a cost of $55,286 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 (.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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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: 7 microns per toy at $0.34 per micron
Direct labor: 14 hours per toy at $7.20 per hour
During July, the company produced 4,700 Maze toys. The toy's production data for the month are as follows
Direct materials: 75,000 microns were purchased at a cost of $0.33 per micron. 33,875 of these microns were still in inventory at the
end of the month
Direct labor: 7180 direct labor-hours were worked at a cost of $55,286
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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