Reference no: EM132991485

Problem - Dawson Toys, Lid., 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: 7 microns per toy at $0.34 per micron

Direct labor: 1.2 hours per toy at $7.20 per hour

During July, the company produced 4,900 Maze toys. The toy's production data for the month are as follows:

Direct materials. 74,000 microns were purchased at a cost of $0.33 per micron. 31,125 of these microns were still in inventory at the end of the month.

 Direct labor: 6,280 direct labor-hours were worked at a cost of $48,356.

Required - Compute the following variances for July:

a. The materials price and quantity variances.

b. The labor rate and efficiency variances.