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.