Question

Direct Materials and Direct Labor Variances At the beginning of June, Bezco Toy Company budgeted 24,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials $36,000 Direct labor 8,640 Total $44,640 The standard materials price is $0.6 per pound. The standard direct labor rate is $9 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials $33,400 Actual direct labor 8,000 Total $41,400 There were no direct materials price or direct labor rate variances for June. In addition, assume no changes in the direct materials inventory balances in June. Bezco Toy Company actually produced 21,600 units during June. Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct materials quantity variance $ 2.5 Favorable Direct labor time variance

Answer 1

$1,000 unfavorable and $224 unfavorable

Step-by-step explanation:

The computation of the direct material quantity variance and the direct labor time variance is shown below:

For direct material quantity variance:

= (Standard direct materials ÷ bugeted toy × actually produced) - actual direct materials

= ($36,000 ÷ $24,000 × 21,600 units) - $33,400

= $32,400 - $33,400

= $1,000 unfavorable

For direct labor time variance

= (Standard direct labor ÷ bugeted toy × actually produced) - actual direct labor

= ($8,640 ÷ $24,000 × 21,600 units) - $8,000

= $7,776 - $8,000

= $224 unfavorable