Direct Materials and Direct Labor Variances At the b..ing of 3un\", Kamber Toy C

Question

Direct Materials and Direct Labor Variances At the b..ing of 3un", Kamber Toy Company budgeted 21.000 toy action rigures to be manufactured·hne at stedry dret m teriak and det labor eeds as 'blat Direct materials Direct labor Total The standard materials price i $0.40 per pound. The standard direct labor rate is $13.00 per hour. At the end of June, the actual drect materials and drect labor costs were as olows Actual direct materials Actual direct lebor Tota There were no direct materials price or direst labor rate veriances for June n addition, ume no changes in the diet naterials inventery baances n u Kmer Toy Compery ualy cd 19,300 units dring r Determine the drect materials quantity and direct labor tme veriancs Round your per unit computstions to twe decimal pleo, rired Evter 21,000 19,110 $40,110 19,900 18,100 umber Direct materials quentity veriance Direct labor time veriance

Explanation / Answer

Budget for Finished Goods = 21000 Units Budget Actual QTY RATE Amount QTY RATE Amount Direct Material                    52,500            0.40          21,000       49,750           0.40          19,900 Direct labor                      1,470         13.00          19,110         1,392         13.00          18,100 Since actually there is production of 19300 units only So we will make our budget of 19300 units instead of 21000 units to find out material & labor variance Budget for Finished Goods = 21000 Units Budget Actual QTY RATE Amount QTY RATE Amount Direct Material                    48,250            0.40          19,300       49,750           0.40          19,900 Direct labor                      1,351         13.00          17,563         1,392         13.00          18,100 Direct materials quantity variance = SP x (SQ – AQ) Direct materials quantity variance =.40*(48250-49750) Direct materials quantity variance = -600 Unfavourable Direct Labor time variance = SR x (S Hrs – A Hrs) Direct Labor time variance =13*(1351-1392) Direct Labor time variance =           (533) Unfavourable

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