Betty's Bakery has the following standard cost sheet for one unit of its most popular cake: Direct materials Direct labor SQ 1.2 pounds 0.8 hours During the month of May, the company made 860 cakes and incurred the following actual costs. Direct materials purchased and used (1,260 pounds) $1,638 Direct labor (920 hours) $10,580 SP $ 1.50 per pound $12.00 per hour Required: Calculate the direct materials price variance. Calculate the direct materials quantity variance . Calculate the direct materials variance. Calculate the direct labor rate variance Calculate the direct labor efficiency variance Calculate the direct labor spending variance. (For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) c Direct materials price variance Direct materials quantity variance Total direct materials spending variance Direct labor rate variance Direct labor efficiency variance Total direct labor spending variance
Betty's Bakery has the following standard cost sheet for one unit of its most popular cake: Direct materials Direct labor SQ 1.2 pounds 0.8 hours During the month of May, the company made 860 cakes and incurred the following actual costs. Direct materials purchased and used (1,260 pounds) $1,638 Direct labor (920 hours) $10,580 SP $ 1.50 per pound $12.00 per hour Required: Calculate the direct materials price variance. Calculate the direct materials quantity variance . Calculate the direct materials variance. Calculate the direct labor rate variance Calculate the direct labor efficiency variance Calculate the direct labor spending variance. (For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) c Direct materials price variance Direct materials quantity variance Total direct materials spending variance Direct labor rate variance Direct labor efficiency variance Total direct labor spending variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Betty's Bakery has the following standard cost sheet for one unit of its most popular cake:
Direct materials,
Direct labor
SQ
1.2 pounds
0.8 hours
During the month of May, the company made 860 cakes and incurred the following actual costs.
Direct materials purchased and used (1,260 pounds) $1,638
Direct labor (920 hours) $10.580
Required:
Calculate the direct materials price variance.
Calculate the direct materials quantity variance
. Calculate the direct materials variance.
Calculate the direct labor rate variance
Calculate the direct labor efficiency variance
Calculate the direct labor spending variance
SP
$ 1.50 per pound
$12.00 per hour
(For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no
effect (i.e., zero variance).)
ec Direct materials price variance
Direct materials quantity variance
Total direct materials spending variance
Direct labor rate variance
Direct labor efficiency variance
Total direct labor spending variance
Transcribed Image Text:Betty's Bakery has the following standard cost sheet for one unit of its most po
50
1.2 pounds
0.8 hours
Direct materials
Direct labor
$ 1.50 per pound
$12.00 per hour
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