Question

Direct Materials and Direct Labor Variances

At the beginning of June, Kimber Toy Company budgeted 11,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows:

Direct materials	$11,000
Direct labor	10,010
Total	$21,010

The standard materials price is $0.50 per pound. The standard direct labor rate is $13.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows:

Actual direct materials	$10,400
Actual direct labor	9,500
Total	$19,900

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. Kimber Toy Company actually produced 10,100 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	$
Direct labor time variance	$

Answer 1

1) calculate direct material quantity variances

direct material quantity variances=(standard quantity - actual quantity)× standard price

standard quantity =$11000/$0.5/11000×10100 =

20200

actual quantity = $10400/$0.5= 20800

Direct material quantity variances =(20200 - 20800)×$0.5 = 300( unfavorable)

2) calculate direct labour time variances

direct labour time variances =(standard hours - actual hours)× standard rate

standard hours =$10010/13/11000×10100 = 707

actual hours = $9500/13 = 730.77

direct labour time variances = (707 - 730.77)× $13 = 309(unfavorable)

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