# 3 answer the following questions using the

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3. Answer the following questions using the information below: Apple Valley Orchards, Inc. (AVO), developed standard costs for direct material and direct labor. In 2011, AVO estimated the following standard costs for one of their most well loved products, the AVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples. Budgeted quantity Budgeted price Direct materials 1.5 pounds \$7.25 per pound Direct labor 0.25 hours \$14.00 per hour During September, AVO produced and sold 1,200 pies using 1,875 pounds of direct materials at an average cost per pound of \$7.00 and 280 direct labor hours at an average wage of \$14.25 per hour. September's direct labor efficiency variance is: A) \$280.00 favorable B) \$280.00 unfavorable C) \$210.00 favorable D) \$210.00 unfavorable Answer: Explanation: A) [280 dlh - (1,200 × 0.25)] × \$14 = \$280 F A
4. September's direct material efficiency variance is: D
5. Tommy's Toys produces two types of toys: trains and dolls. Tommy's uses stainless steel to manufacture the trains and plastic to manufacture the dolls. Information regarding the usage of steel and plastic for the past year follows: Product Names Steel Plastic Direct materials information Standard pounds per unit 1 lb. 0.5 lb. Standard price per pound \$1.50 Actual quantity used per unit 1.5 lbs. 0.75 lbs. Actual price paid for material \$1.25 \$2.00 Actual quantity purchased and used 2,500 lbs. 1,200 lbs. Price variance ? \$900 F Quantity variance \$206 U Flexible budgent variance ? \$522 F Number of units produced 275 550 What is the direct material quantity variance for plastic in the dolls? ? ?