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Dawson Toys, Ltd. produces a toy called the Maze. The company has recently created a standard cost system to help control cos

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Answer #1
Material Price Variance $           1,540.00 Favourable-F
Material quantity variance $           2,495.50 Unfavourable-U
Labor rate variance   $           2,552.00 Unfavourable-U
Labor Efficiency variance $           2,800.00 Unfavourable-U

Alternate answer for material price variance = $805 Favorable

Material Price Variance
( Standard Rate - Actual Rate ) x Actual Quantity
( $                    0.31 - $                     0.29 ) x 40250
805
Variance $                 805.00 Favourable-F

Working

Standard DATA for 4600 Toys
Quantity (SQ) Rate (SR) Standard Cost
[A] [B] [A x B]
Direct Material ( 7 microns x 4600 Toys)=32200 microns $                  0.31 $          9,982.00
Direct labor ( 1.3 hours x 4600 Toys)=5980 hours $                  7.00 $        41,860.00
Actual DATA for 4600 Toys
Quantity (AQ) Rate (AR) Actual Cost
Direct Material 40250 $            0.29 $     11,672.50
Direct labor 6380 $            7.40 $     47,212.00
Material Price Variance
( Standard Rate - Actual Rate ) x Actual Quantity
( $                    0.31 - $                     0.29 ) x 77000
1540
Variance $             1,540.00 Favourable-F
Material Quantity Variance
( Standard Quantity - Actual Quantity ) x Standard Rate
( 32200 - 40250 ) x $       0.31
-2495.5
Variance $             2,495.50 Unfavourable-U
Labor Rate Variance
( Standard Rate - Actual Rate ) x Actual Labor Hours
( $                    7.00 - $                     7.40 ) x 6380
-2552
Variance $             2,552.00 Unfavourable-U
Labour Efficiency Variance
( Standard Hours - Actual Hours ) x Standard Rate
( 5980 - 6380 ) x $       7.00
-2800
Variance $             2,800.00 Unfavourable-U
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