Question

At the beginning of June, Bezco Toy Company budgeted 13,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials $31,850 Direct labor 7,800 Total $39,650 The standard materials price is $0.70 per pound. The standard direct labor rate is $10.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials $30,300 Actual direct labor 7,400 Total $37,700 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 12,000 units during June. Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places and round your answers to the nearest dollar, 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

Answer 1

	Material cost	labor cost
Total cost	$      31,850.00	$                 7,800.00
Total expected production	$      13,000.00	$               13,000.00
Cost per toy	31850/13000	7800/13000
Cost per toy	$               2.45	$                        0.60
Material cost per pound	$               0.70
Labor cost per hour		10
Total pound required	2.45/0.7
Total pound required	3.50
Hours required		0.60/10
Hours required		0.06	hours
Actual output	12000
Material Variance
	Standard	Budgeted based on actual results	Actual
Price	$               0.70	$                        0.70	$           0.70
Quantity	3.50	42,000	43,286	30300/0.70
Cost per unit	$               2.45	$               29,400.00	$ 30,300.00
Total Material Cost variance		=29400-30300
Total Material Cost variance		$                   (900.00)	Unfavorable
Material Price variance	= (Standard price - Actual Price) * Actual usage
	'(0.7-0.7)*43285.7142857143
	$                   -	Favorable
Material quantity variance	= (Standard Quantity - Actual Quantity) * Budgered Price
	'(42000-43285.7142857143)*0.7
	$          (900.00)	Unfavorable
Check	0
Actual output	12000
Labor variance
	Standard	Budgeted based on actual results	Actual
Price	$             10.00	$                      10.00	$         10.00	7400
Hours	0.06	720	740	7400/10
Cost per unit	$               0.60	$                 7,200.00	$    7,400.00
Total labor cost variance		=7200-7400
Total labor cost variance		$                   (200.00)	Unfavorable
Labor Price variance	= (Standard price - Actual Price) * Actual usage
	'(10-10)*740
	$                   -	Favorable
Labor efficiency variance	= (Standard Quantity - Actual Quantity) * Budgered Price
	'(720-740)*10
	$          (200.00)	Unfavorable
Check	-