Betty's Bakery has the following standard cost sheet for one unit of its most popular cake: SP $ 1.50 per pound $ 12.00 per hour Direct materials Direct labor 50 1.2 pounds 0.8 hours During the month of May, the company made 960 cakes and incurred the following actual costs: Direct materials purchased and used (1,460 pounds), $1,898 Direct labor (1,020 hours), $11,730 Required: . Calculate the direct materials price variance. 2. Calculate the direct materials quantity variance. . Calculate the direct materials spending variance.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Owe
![E9-7 (Algo) Calculating Direct Material and Direct Labor Variances [LO 9-3, 9-4]
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 960 cakes and incurred the following actual costs:
Direct materials purchased and used (1,460 pounds), $1,898
Direct labor (1,020 hours), $11,730
SP
$ 1.50 per pound
$ 12.00 per hour
Required:
1. Calculate the direct materials price variance.
2. Calculate the direct materials quantity variance.
3. Calculate the direct materials spending variance.
4. Calculate the direct labor rate variance.
5. Calculate the direct labor efficiency variance.
6. Calculate the direct labor spending variance.
Note: 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). Round your intermediate calculations to two decimal places.
1. Direct materials price variance.
2. Direct materials quantity variance
3. Total direct materials spending variance
4. Direct labor rate variance
5. Direct labor efficiency variance
6. Total direct labor spending variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8eb44629-4847-42c2-9c22-3d0ecb75e351%2F0101e40a-6d91-4975-aa51-d8ca5e94d014%2Fm7ivwz_processed.jpeg&w=3840&q=75)
Step by step
Solved in 5 steps with 6 images
