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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: 7 microns per toy at $0.3 per micronDirect labor: 1.4 hours per toy at $6.6 per hour
During July, the company produced 4,700 Maze toys. Production data for the month on the toy follow:
Direct materials:70,000 microns were purchased at a cost of $0.28 per micron. 28,875 of these microns were still in inventory at the end of the month.Direct labor: 7,180 direct labor-hours were worked at a cost of $50,260.
Requirement 1: Compute the direct materials price and quantity variances for July.Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect. Input all amounts as positive values.
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