Solution-Compute direct labor rate and efficiency variance

Compute direct labor rate and efficiency variance

Assignment Help Managerial Accounting

Reference no: EM132661268

Topper Toys has developed a new toy called the Brain buster. The company has a standard cost system to help control costs and has established the following standards for the Brain buster toy.

Direct material: 8 diodes per day at $ 0.30 per diode
Direct labor: 0.6 hours per toy at $14 per hour
During the august, the company produced 5,000 Brain buster toys. Production data on the toy for August follow.
Direct material: 7,000 diodes were purchased at cost of $0.28 per diode. 20,000 of these diodes were still in inventory at the end of month.
Direct labor: 3,200 direct labor hours were worked at a cost $48,000

Required:

Problem 1. Discuss brief explanation of the possible causes of each variance.

Problem 2. Compute the following variances for August

Direct material price and quantity variance
Direct labor rate and efficiency variance

Reference no: EM132661268

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Compute direct labor rate and efficiency variance

Reference no: EM132661268

Reference no: EM132661268

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