Reference no: EM132670851
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: 7,0000 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: Compute the following variances for August
Direct material price and quantity variance
Direct labor rate and efficiency variance.
Problem 2: Explain the every numerical parts clearly you have done in question 1.
Problem 3: Prepare brief explanation of the possible causes of each variance.