Explore BrainMass

Direct labor rate and efficiency variances

Topper Toys has developed a new toy called the Brainbuster. The company has a standard cost system to help control costs and has established the following standards for the Brainbuster toy:

Direct materials: 7 diodes per toy at $0.32 per diode
Direct labor: 1.2 hours per toy at $7.30 per hour

During August, the company produced 4,800 Brainbuster toys. Production data on the toy for August follow:

Direct materials: 70,000 diodes were purchased at a cost of $0.29 per diode. 28,000 of these diodes were still in inventory at the end of the month.
Direct labor: 6,260 direct labor-hours were worked at a cost of $48,828.
Compute direct labor rate and efficiency variances