Reference no: EM131913741

Problem - Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy:

Direct materials: 6 microns per toy at $0.34 per micron

Direct labor: 1.3 hours per toy at $7.1 per hour

During July, the company produced 4,600 Maze toys. Production data for the month on the toy follow:

Direct materials: 78,000 microns were purchased at a cost of $0.31 per micron. 43,500 of these microns were still in inventory at the end of the month.

Direct labor: 6,380 direct labor-hours were worked at a cost of $49,764.

Requirement 1: Compute the direct materials price and quantity variances for July.

Requirement 2: Compute the direct labor rate and efficiency variances for July.