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Connect .> C Secure | https://newconnect.mheducation.com/flow/connect.html : Apps P Haiku Drive Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question 8 Exercise 10-8 Direct Materials and Direct Labor Variances [LO10-1, L010-2] 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 points Direct materials: 6 microns per toy at $1.50 per micron Direct labor: 1.3 hours per toy at $21 per hour During July. the company produced 3,000 Maze toys. The toy'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 labor 4,000 direct labor-hours were worked at a cost of $88,000. Required 1. Compute the following variances for July (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) a. The materials price and quantity variances. b. The labor rate and efficiency variances. Answer is complete but not entirely correct. Material price Mc Prev 8of 8ll: Next O Type here to search 625 PM 3/11/2018

Explanation / Answer

Calculate variance :

1a) Material price variance (1.50-1.48)*25000 500 F Material quantity variance (3000*6-20000)*1.50 3000 U 1b) Labour rate variance (21*4000-88000) 4000 U Labour efficiency variance (3000*1.3-4000)*21 2100 U

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