Question

Direct Materials and Direct Labor Variances At the beginning of June, Bezco Toy Company budgeted 5,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials $50,000 Direct labor 36,000 Total $86,000 The standard materials price is $4.00 per pound. The standard direct labor rate is $18.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials $49,600 Actual direct labor 34,020 Total $83,620 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 4,850 units during June. Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Answer 1

Answer:

DM quantity (1,100.00)

DL rate               0

Explanation:

Direct Materials:

First, we need to calculate standard and actual quantity

Direct Materials $50,000

standard cost               $4

Standard quantity for 5,000

50,000 / 4 = 12,500

Quantity per unit 12,500 / 5,000 = 2.5

Standard quantity for 4,850

4,850 x 2.5 = 12,125

Actual quantity $49,600

$49,600 / $4 each = 12,400 pounds

$(standard\:quantity-actual\:quantity) \times standard \: cost = DM \: quantity \: variance$

std quantity 12125.00

actual quantity 12400.00

std cost  $4.00

$(12125-12400) \times 4 = DM \: quantity \: variance$

efficiency variance  $(1,100.00)

Labor Rate Variance

"there were no direct materials price or direct labor rate variance for June"

The price keep at the same level, so the DL rate variance is zero.