Use the following standard cost card for 1 gallon of ice cream to answer the questions. STANDARD COST CARD Product: Gallon of Ice Cream Manufactering cost info Standard Quantity x standard cost per unitx x cost summary direct materials cream  sugar 5 quarts 16 ounces x $1.15 per quart $0.08 per ounce x $5.75 $1.28 direct labor   3 min x $36.00 per hour x $1.80 total direct costs   x   x $8.83 Actual direct costs incurred to make 50 gallons of ice cream: 275 quarts of cream at $1.05 per quart 832 ounces of sugar at $0.075 per ounce 165 minutes of labor at $37 per hour All material used was bought during the current period. Required: Compute the material and labor variances. Comment on the results and possible causes of the variances.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Use the following standard cost card for 1 gallon of ice cream to answer the questions.

STANDARD COST CARD

Product: Gallon of Ice Cream

Manufactering cost info Standard Quantity x standard cost per unitx x cost summary

direct materials

cream 

sugar

5 quarts

16 ounces

x

$1.15 per quart

$0.08 per ounce

x

$5.75

$1.28

direct labor

 

3 min x $36.00 per hour x $1.80
total direct costs   x   x $8.83

Actual direct costs incurred to make 50 gallons of ice cream:

275 quarts of cream at $1.05 per quart

832 ounces of sugar at $0.075 per ounce

165 minutes of labor at $37 per hour

All material used was bought during the current period.

Required:

Compute the material and labor variances.

Comment on the results and possible causes of the variances.

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