Question

He 90: Home Insert Design Layout Callboy - 16 - Format TV- XX Ciboard Review References A. A A . P. Mailings E . ViewH elp L Documenti Word Kengan Wad Tell me what you want to do Mic Аавьсонсох Аавьс Аавьсet Аав аавьсet Aaco Aarocco Normal Heading! Heading 2 Te Stele Stem. Emphasis A PE Paragraph Dawson Toys, Lid, 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 Mazeloy Direct materials 6 microns per toy at $1.50 per micron Direct labor 13 hours per toy at $21 per hour During July, the company produced 3,000 Maze toys. The boy's production data for the month are as follows: Direct materials 25 000 microns were purchased at a cost of $1.48 per micron 5,000 of these microns were still in inventory at the end of the month Direct laber 4000 direct labor hours were worked at a cost of $88.000 Required: 1 Compute the following vanances for positive values.) a The materials price and quantity variances The labor rate and efficiency variances adicate the effect of each wariance by select for favorable for overb e forefect

Answer 1

Data for Variance
	Standard (1 unit)				Standard (3000 units)				Actual (3000 units)
	Qty/ Hour	Price/ Rate	Amount		Qty/ Hour	Price/ Rate	Amount		Qty/ Hour	Price/ Rate	Amount
Material	6	$        1.50	$        9.00		18000	$        1.50	$ 27,000.00		20000	$        1.48	$ 29,600.00
Labor	1.3	$      21.00	$      27.30		3900	$      21.00	$ 81,900.00		4000	$      22.00	$ 88,000.00

Material Price Variance =			(Standard Price - Actual Price) x Actual Quantity
		=	($ 1.50 - $ 1.48) x 20000
		=	$    400.00	(F)
Material Quan. Variance =			(Standard Quantity - Actual Quantity) x Standard Price
		=	(18000 - 20000) x $ 1.50
		=	$ 3,000.00	(U)
Labor Rate Variance		=	(Standard Rate - Actual Rate) x Actual Hours
		=	($ 21 - $ 22) x 4000
		=	$ 4,000.00	(U)
Labor Effi. Variance		=	(Standard hours - Actual Hours) x Standard Rate
		=	(3900 - 4000) x $ 21
		=	$ 2,100.00	(U)