Direct Materials and Direct Labor Variances At the beginning of June, Kimber Toy Company budgeted 15,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials $9,000 Direct labor 10,500 Total $19,500 The standard materials price is $0.40 per pound. The standard direct labor rate is $14.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials $8,300 Actual direct labor 9,700 Total $18,000 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 13,400 units during June.
Direct Materials and Direct Labor Variances At the beginning of June, Kimber Toy Company budgeted 15,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials $9,000 Direct labor 10,500 Total $19,500 The standard materials price is $0.40 per pound. The standard direct labor rate is $14.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials $8,300 Actual direct labor 9,700 Total $18,000 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 13,400 units during June.
Chapter1: Financial Statements And Business Decisions
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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.
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Direct Materials and Direct Labor Variances
Transcribed Image Text:**Direct Materials and Direct Labor Variances**
At the beginning of June, Kimber Toy Company budgeted 15,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows:
- **Direct materials:** $9,000
- **Direct labor:** $10,500
- **Total:** $19,500
The standard materials price is $0.40 per pound. The standard direct labor rate is $14.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows:
- **Actual direct materials:** $8,300
- **Actual direct labor:** $9,700
- **Total:** $18,000
There were no direct materials price or direct labor rate variances for June. Additionally, assume no changes in the direct materials inventory balances in June. Kimber Toy Company actually produced 13,400 units during June.
**Task:** 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.
- **Direct materials quantity variance:** $____ **Favorable**
- **Direct labor time variance:** $____ **Favorable**
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