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: 8 microns per toy at $0.34 per micron |
| Direct labor: 1.3 hours per toy at $7.20 per hour |
| During July, the company produced 5,000 Maze toys. Production data for the month on the toy follow: |
| Direct materials: 71,000 microns were purchased at a cost of $0.32 per micron. 21,000 of these microns were still in inventory at the end of the month. |
| Direct labor: 7,100 direct labor-hours were worked at a cost of $56,090. |
| 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).)
|
| . |
A. The materials price and quantity variances.
Material price variance: ___
Material quantity variance: ___
| B. |
The labor rate and efficiency variances.
Labor rate variance: ___
Labor efficiency variance: ___ |
|