Question :

Dawson Toys, Ltd., creates a toy called the Maze. The company has currently established a standard cost system to help control costs and has established the subsequent standards for the Maze toy:

Direct materials: 6 microns per toy at $0.34 per micron

Direct labor: 1.3 hours per toy at $7.1 per hour

During July, the company produced 4,600 Maze toys. Production data for the month on the toy follow:

Direct materials:              

78,000 microns were purchased at a cost of $0.31 per micron. 43,500 of these microns were still in inventory at the end of the month.

Direct labor:  6,380 direct labor-hours were worked at a cost of $49,764. rev: 03-21-2011

Requirement 1:

Evaluate the direct materials price and quantity variances for July.2.value:

Requirement 2:

Determine the direct labor rate and efficiency variances for July.