Question

Direct Materials and Direct Labor Variances At the beginning of June, Bezco Toy Company budgeted 20,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials $49,000 Direct labor 15,400 Total $64,400 The standard materials price is $0.70 per pound. The standard direct labor rate is $11.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials $46,400 Actual direct labor 14,600 Total $61,000 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. Bezco Toy Company actually produced 18,400 units during June. Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places and round your answers to the nearest dollar, 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 Direct labor time variance

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

E F G BC D Answer 2 Firstly we have to caluclate the standard cost of material and direct labor for 18400 Units 4 So, Standard cost for 18400 Units 6 Particulars 7 Direct Material (49000*18400/20000) 8 Direct Labour (15400*18400/20000) 9 Total $ $ $ Amount 45,080.00 14,168.00 59,248.00 11 Since there is no price variance, it means differenct between actual cost is due to effeciency and time variance only 12 13 So 14 Direct Material Quantity variance = Actual cost - standard cost 15 = 46400-45080 16 = $ 1320 Unfavourable 18 Direct Labor Time Variance = actual cost - standard cost 19 = 14600 -14168 20 = $ 432 Unfavourable 22 Thus the final answer 23 Direct Material Quantity variance 24 Direct Labor Time Variance $ $ 1,320 Unfavourable 432 Unfavourable 25