Determine the standard price of a kilogram of while chocolate. 2.Determine the s
ID: 2461646 • Letter: D
Question
Determine the standard price of a kilogram of while chocolate. 2.Determine the standard quantity of white chocolate for a dozen truffles. Determine the standard cost of the white chocolate in a dozen truffles. Dawson Toys, Ltd, produces a toy called the Maze. the company has recently established a standard cost system to help control costs and has established the following, standards for the Maze toy: Direct materials: 6 microns-per toy at $0.50 per micron Direct labor: 1.3 l^urs per toy at $8 hour During July, the company produced 3,000 Maze toys. Production data for the month on the toy follow: Direct materials: '25,OO0,microns were purchased at a.cost of $0.48 per micron. 5,000 of these microns were still in inventory at the end of the month. Direct labor: 4,000 direct labor-hours were worked at a cost of $36,000. Required:Compute the following variances for july: a.Direct materials price and quantity variances. b.Direct labor rate and efficiency variances. 2.Prepare a brief explanation of the possible causes of each variance.Explanation / Answer
a)Material price variance = AQ USED (AP -SP)
= 20000 (.48 - .50)
= 20000 * -.02
= $ - 400 F
Material quantity variance = SR (AQ- Sq)
= .50[ 20000 - (6*3000) ]
= .50 [ 20000 - 18000]
= .50 * 2000
= 1000 U
B)Labor rate variance = AH * AR- AH* SR
= 36000 - (4000 * 8)
= 36000 - 32000
= 4000 U
Labor efficiency variance = SR (AH-SH)
= 8 [4000 - (3000 * 1.3)]
= 8 [4000 - 3900]
= 8 * 100
= 800 U
2)The material price variance is favorable due to lesser actual cost than standard .The quantity variance is unfavorable due to usage more than required.
The labor rate and effciency variance is both unfavorable due to higher actual payout and more hours worked than required .
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