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Direct labor variances:

Actual Hours of

Input, at the

Actual Rate Actual Hours of Input, at the Standard Rate Standard Hours Allowed for Output, at the

Standard Rate

(AH ? AR) (AH ? SR) (SH ? SR)

4,000 hours ?

$8.00 per hour 3,900 hours* ?

$8.00 per hour

$36,000 = $32,000 = $31,200

? ? ?

Rate Variance,

$4,000 U Efficiency Variance,

$800 U

Total Variance,

$4,800 U

*3,000 toys ? 1...

A variance usually has many possible explanations. In particular, we should always keep in mind that the standards themselves may be incorrect. Some of the other possible explanations for the variances observed at Dawson Toys appear below:

Materials Price Variance?Since this variance is favorable; the actual price paid per unit for the material was less than the standard price...

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