Question

At the beginning of June, Kimber Toy Company budgeted 24,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows:

Direct materials	$30,000
Direct labor	18,480
Total	$48,480

The standard materials price is $0.50 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	$28,500
Actual direct labor	17,500
Total	$46,000

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 22,100 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.

Direct materials quantity variance	$
Direct labor time variance	$

Answer 1

(1)

direct Material quantity variance = standard price x (standard quantity - actual quantity used)

= $0.50 x (60000 - 57000)

= $1500 Favorable

Where,

Standard quantity = $30000/$0.50 = 60000 units

actual quantity = $28500/$0.50 = 57000 units

Note: There were no direct materials price variances

(2)

direct Labor time variance = standard rate x (standard hours - actual hours)

= $11 x (1680 - 1591)

= $91 Favorable

Where,

Standard hours = $18480/$11 = 1680 hours

actual hours = $17500/$11 = 1591 hours

note = There were no direct labor rate variances