Direct Materials and Direct Labor Variances At the beginning of June, Bezco Toy

Question

Direct Materials and Direct Labor Variances At the beginning of June, Bezco Toy Company budgeted 12,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials Direct labor Total The standard materials price is $0.4 per pound. The standard direct labor rate is $14 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials Actual direct labor Total 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 11,000 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 $12,000 6,720 $18,720 $11,300 6,300 $17,600

Explanation / Answer

Standard direct materials per unit = 12000/12000 = $1 Standard direct labor cost per unit = 6720/12000 = $0.56 Direct materials quantity variance 300 Unfavorable =11300-(11000*1) Direct labor time variance 140 Unfavorable =6300-(11000*0.56)

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