Reference no: EM133138448

Question - Dawson Toys, Limited, produces a toy called the Maze. The company has recently created 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 $0.32 per micron

Direct labor: 1.1 hours per toy at $7.00 per hour

During July, the company produced 5,400 Maze toys. The toy's production data for the month are as follows:

Direct materials: 73,000 microns were purchased at a cost of $0.28 per micron. 19,000 of these microns were still in inventory at the end of the month.

Direct labor: 6,340 direct labor-hours were worked at a cost of $46,916.

Required - Compute the following variances for July:

a. The materials price and quantity variances.

b. The labor rate and efficiency variances.