Question

At the beginning of June, Bezco Toy Company budgeted 24,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials $36,000 Direct labor 8,640 Total $44,640 The standard materials price is $0.6 per pound. The standard direct labor rate is $9 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials $33,400 Actual direct labor 8,000 Total $41,400 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 21,600 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. Direct materials quantity variance $ -3,600 Unfavorable Direct labor time variance $ -864 Unfavorable Feedback

Answer 1

Answer:

Direct material quantity variance = $1,000

Direct labor time variance =  $224

Explanation:

Calculation of the direct materials quantity

Direct material quantity variance = Actual quantity at standard price - Standard Quantity at standard price

Direct material quantity variance = $33,400 - (($36,000/24,000) * 21,600

Direct material quantity variance = $$33,400 - ($1.5 * $21,600)

Direct material quantity variance = $33,400 - $32,400

Direct material quantity variance = $1,000

Calculation of direct labor time variances

Direct labor time variance = Actual labor time at standard cost - Standard labor time at standard cost

Direct labor time variance = $8,000- (($8,640/24,000) * $21,600

Direct labor time variance = $8,000 - (0.36) * $21,600

Direct labor time variance = $8,000 - $7,776

Direct labor time variance =  $224