Activity Variance, Spending Variance, Materials Price Variance, Materials Quantity Variance LO9â€”1, 9â€”2, LO9â€”3, LO10â€”1 Southside Pizzeria wants to improve its ability to manage the ingredient costs associated with making and selling its pizzas. For the month of June, the company plans to make 1,000 pizzas. It has created a planning budget that includes a cost formula for mozzarella cheese of $2.40 per pizza At the end of June, Southside actually sold 1,100 pizzas, and the actual cost of the cheese that it used during the month was $2,632. Required: What is the mozzarella cheese activity variance for June? What as the mozzarella cheese spending variance for June? Assume that the company establishes a price standard of S0.30 per ounce for mozzarella cheese and a quantity standard of eight ounces of cheese per pizza. Also, assume that Southside actually used 9,400 ounces of cheese during the month to make 1,100 pizzas. What is the materials price variance for mozzarella cheese for June? What is the materials quant y variance for mozzarella cheese for June? What is the materials spending variance for mozzarella cheese for June?

Question

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Answer 1

Textbook Question

Chapter IE, Problem 1E

Activity Variance, Spending Variance, Materials Price Variance, Materials Quantity Variance LO9â€”1, 9â€”2, LO9â€”3, LO10â€”1

Southside Pizzeria wants to improve its ability to manage the ingredient costs associated with making and selling its pizzas. For the month of June, the company plans to make 1,000 pizzas. It has created a planning budget that includes a cost formula for mozzarella cheese of $2.40 per pizza At the end of June, Southside actually sold 1,100 pizzas, and the actual cost of the cheese that it used during the month was $2,632.

Required:

What is the mozzarella cheese activity variance for June?
What as the mozzarella cheese spending variance for June?
Assume that the company establishes a price standard of S0.30 per ounce for mozzarella cheese and a quantity standard of eight ounces of cheese per pizza. Also, assume that Southside actually used 9,400 ounces of cheese during the month to make 1,100 pizzas.

What is the materials price variance for mozzarella cheese for June?
What is the materials quant y variance for mozzarella cheese for June?
What is the materials spending variance for mozzarella cheese for June?

1.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The activity variance for June of Mo cheese.

Answer to Problem 1E

The activity variance for June of Mo cheese is 240 unfavorable.

Explanation of Solution

Activity variance =(Standard units- Actual units)×Standard costActivity variance =(1000-1100)×$2.4Activity variance =240 U

2.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The spending variance for June of Mo cheese.

Answer to Problem 1E

The spending variance for June of Mo cheese is $8 favorable

Explanation of Solution

Spending variance= (Actual unit sold× Standard cost per unit)- Actual cost Spending variance= (1100×$2.40)-2632Spending variance= $8 F

3.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The material price variance, quantity variance, and spending variance for June of Mo cheese.

Answer to Problem 1E

The material price variance is $188 Favorable, quantity variance is $180 Unfavorable, and spending variance is $8 Favorable for June of Mo cheese.

Explanation of Solution

Material price variance

Material Price Variance= Actual Quantity (Actual Price- Standard Price)Material Price Variance=$2,632(9,400×$0.30)Material Price Variance=$188 F

Material quantity variance

Material Quantity Variance= Standard Price×( Actual Quantity Used- Standard Quantity for actual production)Material Quantity Variance=$0.30×(9,400-(1100 pizza×8 ounce per pizza))Material Quantity Variance=$180 U

Material spending variance

Material Spending Variance= Material Price Variance+ Material Quantity Variance Material Spending Variance=$188 F+$180 UMaterial Spending Variance= $8 F

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Answer 2

Textbook Question

Chapter IE, Problem 1E

Activity Variance, Spending Variance, Materials Price Variance, Materials Quantity Variance LO9â€”1, 9â€”2, LO9â€”3, LO10â€”1

Southside Pizzeria wants to improve its ability to manage the ingredient costs associated with making and selling its pizzas. For the month of June, the company plans to make 1,000 pizzas. It has created a planning budget that includes a cost formula for mozzarella cheese of $2.40 per pizza At the end of June, Southside actually sold 1,100 pizzas, and the actual cost of the cheese that it used during the month was $2,632.

Required:

What is the mozzarella cheese activity variance for June?
What as the mozzarella cheese spending variance for June?
Assume that the company establishes a price standard of S0.30 per ounce for mozzarella cheese and a quantity standard of eight ounces of cheese per pizza. Also, assume that Southside actually used 9,400 ounces of cheese during the month to make 1,100 pizzas.

What is the materials price variance for mozzarella cheese for June?
What is the materials quant y variance for mozzarella cheese for June?
What is the materials spending variance for mozzarella cheese for June?

1.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The activity variance for June of Mo cheese.

Answer to Problem 1E

The activity variance for June of Mo cheese is 240 unfavorable.

Explanation of Solution

Activity variance =(Standard units- Actual units)×Standard costActivity variance =(1000-1100)×$2.4Activity variance =240 U

2.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The spending variance for June of Mo cheese.

Answer to Problem 1E

The spending variance for June of Mo cheese is $8 favorable

Explanation of Solution

Spending variance= (Actual unit sold× Standard cost per unit)- Actual cost Spending variance= (1100×$2.40)-2632Spending variance= $8 F

3.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The material price variance, quantity variance, and spending variance for June of Mo cheese.

Answer to Problem 1E

The material price variance is $188 Favorable, quantity variance is $180 Unfavorable, and spending variance is $8 Favorable for June of Mo cheese.

Explanation of Solution

Material price variance

Material Price Variance= Actual Quantity (Actual Price- Standard Price)Material Price Variance=$2,632(9,400×$0.30)Material Price Variance=$188 F

Material quantity variance

Material Quantity Variance= Standard Price×( Actual Quantity Used- Standard Quantity for actual production)Material Quantity Variance=$0.30×(9,400-(1100 pizza×8 ounce per pizza))Material Quantity Variance=$180 U

Material spending variance

Material Spending Variance= Material Price Variance+ Material Quantity Variance Material Spending Variance=$188 F+$180 UMaterial Spending Variance= $8 F

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Answer 3

Textbook Question

Chapter IE, Problem 1E

Activity Variance, Spending Variance, Materials Price Variance, Materials Quantity Variance LO9â€”1, 9â€”2, LO9â€”3, LO10â€”1

Southside Pizzeria wants to improve its ability to manage the ingredient costs associated with making and selling its pizzas. For the month of June, the company plans to make 1,000 pizzas. It has created a planning budget that includes a cost formula for mozzarella cheese of $2.40 per pizza At the end of June, Southside actually sold 1,100 pizzas, and the actual cost of the cheese that it used during the month was $2,632.

Required:

What is the mozzarella cheese activity variance for June?
What as the mozzarella cheese spending variance for June?
Assume that the company establishes a price standard of S0.30 per ounce for mozzarella cheese and a quantity standard of eight ounces of cheese per pizza. Also, assume that Southside actually used 9,400 ounces of cheese during the month to make 1,100 pizzas.

What is the materials price variance for mozzarella cheese for June?
What is the materials quant y variance for mozzarella cheese for June?
What is the materials spending variance for mozzarella cheese for June?

1.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The activity variance for June of Mo cheese.

Answer to Problem 1E

The activity variance for June of Mo cheese is 240 unfavorable.

Explanation of Solution

Activity variance =(Standard units- Actual units)×Standard costActivity variance =(1000-1100)×$2.4Activity variance =240 U

2.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The spending variance for June of Mo cheese.

Answer to Problem 1E

The spending variance for June of Mo cheese is $8 favorable

Explanation of Solution

Spending variance= (Actual unit sold× Standard cost per unit)- Actual cost Spending variance= (1100×$2.40)-2632Spending variance= $8 F

3.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The material price variance, quantity variance, and spending variance for June of Mo cheese.

Answer to Problem 1E

The material price variance is $188 Favorable, quantity variance is $180 Unfavorable, and spending variance is $8 Favorable for June of Mo cheese.

Explanation of Solution

Material price variance

Material Price Variance= Actual Quantity (Actual Price- Standard Price)Material Price Variance=$2,632(9,400×$0.30)Material Price Variance=$188 F

Material quantity variance

Material Quantity Variance= Standard Price×( Actual Quantity Used- Standard Quantity for actual production)Material Quantity Variance=$0.30×(9,400-(1100 pizza×8 ounce per pizza))Material Quantity Variance=$180 U

Material spending variance

Material Spending Variance= Material Price Variance+ Material Quantity Variance Material Spending Variance=$188 F+$180 UMaterial Spending Variance= $8 F

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Answer 4

Textbook Question

Chapter IE, Problem 1E

Activity Variance, Spending Variance, Materials Price Variance, Materials Quantity Variance LO9â€”1, 9â€”2, LO9â€”3, LO10â€”1

Southside Pizzeria wants to improve its ability to manage the ingredient costs associated with making and selling its pizzas. For the month of June, the company plans to make 1,000 pizzas. It has created a planning budget that includes a cost formula for mozzarella cheese of $2.40 per pizza At the end of June, Southside actually sold 1,100 pizzas, and the actual cost of the cheese that it used during the month was $2,632.

Required:

What is the mozzarella cheese activity variance for June?
What as the mozzarella cheese spending variance for June?
Assume that the company establishes a price standard of S0.30 per ounce for mozzarella cheese and a quantity standard of eight ounces of cheese per pizza. Also, assume that Southside actually used 9,400 ounces of cheese during the month to make 1,100 pizzas.

What is the materials price variance for mozzarella cheese for June?
What is the materials quant y variance for mozzarella cheese for June?
What is the materials spending variance for mozzarella cheese for June?

1.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The activity variance for June of Mo cheese.

Answer to Problem 1E

The activity variance for June of Mo cheese is 240 unfavorable.

Explanation of Solution

Activity variance =(Standard units- Actual units)×Standard costActivity variance =(1000-1100)×$2.4Activity variance =240 U

2.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The spending variance for June of Mo cheese.

Answer to Problem 1E

The spending variance for June of Mo cheese is $8 favorable

Explanation of Solution

Spending variance= (Actual unit sold× Standard cost per unit)- Actual cost Spending variance= (1100×$2.40)-2632Spending variance= $8 F

3.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The material price variance, quantity variance, and spending variance for June of Mo cheese.

Answer to Problem 1E

The material price variance is $188 Favorable, quantity variance is $180 Unfavorable, and spending variance is $8 Favorable for June of Mo cheese.

Explanation of Solution

Material price variance

Material Price Variance= Actual Quantity (Actual Price- Standard Price)Material Price Variance=$2,632(9,400×$0.30)Material Price Variance=$188 F

Material quantity variance

Material Quantity Variance= Standard Price×( Actual Quantity Used- Standard Quantity for actual production)Material Quantity Variance=$0.30×(9,400-(1100 pizza×8 ounce per pizza))Material Quantity Variance=$180 U

Material spending variance

Material Spending Variance= Material Price Variance+ Material Quantity Variance Material Spending Variance=$188 F+$180 UMaterial Spending Variance= $8 F

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

1.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The activity variance for June of Mo cheese.

Answer to Problem 1E

The activity variance for June of Mo cheese is 240 unfavorable.

Explanation of Solution

Activity variance =(Standard units- Actual units)×Standard costActivity variance =(1000-1100)×$2.4Activity variance =240 U

2.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The spending variance for June of Mo cheese.

Answer to Problem 1E

The spending variance for June of Mo cheese is $8 favorable

Explanation of Solution

Spending variance= (Actual unit sold× Standard cost per unit)- Actual cost Spending variance= (1100×$2.40)-2632Spending variance= $8 F

3.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The material price variance, quantity variance, and spending variance for June of Mo cheese.

Answer to Problem 1E

The material price variance is $188 Favorable, quantity variance is $180 Unfavorable, and spending variance is $8 Favorable for June of Mo cheese.

Explanation of Solution

Material price variance

Material Price Variance= Actual Quantity (Actual Price- Standard Price)Material Price Variance=$2,632(9,400×$0.30)Material Price Variance=$188 F

Material quantity variance

Material Quantity Variance= Standard Price×( Actual Quantity Used- Standard Quantity for actual production)Material Quantity Variance=$0.30×(9,400-(1100 pizza×8 ounce per pizza))Material Quantity Variance=$180 U

Material spending variance

Material Spending Variance= Material Price Variance+ Material Quantity Variance Material Spending Variance=$188 F+$180 UMaterial Spending Variance= $8 F

Answer 8

1.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The activity variance for June of Mo cheese.

Answer to Problem 1E

The activity variance for June of Mo cheese is 240 unfavorable.

Explanation of Solution

Activity variance =(Standard units- Actual units)×Standard costActivity variance =(1000-1100)×$2.4Activity variance =240 U

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The activity variance for June of Mo cheese.

Answer 13

Answer to Problem 1E

The activity variance for June of Mo cheese is 240 unfavorable.

Answer 14

Explanation of Solution

Activity variance =(Standard units- Actual units)×Standard costActivity variance =(1000-1100)×$2.4Activity variance =240 U

Answer 15

2.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The spending variance for June of Mo cheese.

Answer to Problem 1E

The spending variance for June of Mo cheese is $8 favorable

Explanation of Solution

Spending variance= (Actual unit sold× Standard cost per unit)- Actual cost Spending variance= (1100×$2.40)-2632Spending variance= $8 F

Answer 16

2.

Expert Solution

Answer 17

2.

Expert Solution

Answer 18

Expert Solution

Answer 19

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The spending variance for June of Mo cheese.

Answer 20

Answer to Problem 1E

The spending variance for June of Mo cheese is $8 favorable

Answer 21

Explanation of Solution

Spending variance= (Actual unit sold× Standard cost per unit)- Actual cost Spending variance= (1100×$2.40)-2632Spending variance= $8 F

Answer 22

3.

Expert Solution

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The material price variance, quantity variance, and spending variance for June of Mo cheese.

Answer to Problem 1E

The material price variance is $188 Favorable, quantity variance is $180 Unfavorable, and spending variance is $8 Favorable for June of Mo cheese.

Explanation of Solution

Material price variance

Material Price Variance= Actual Quantity (Actual Price- Standard Price)Material Price Variance=$2,632(9,400×$0.30)Material Price Variance=$188 F

Material quantity variance

Material Quantity Variance= Standard Price×( Actual Quantity Used- Standard Quantity for actual production)Material Quantity Variance=$0.30×(9,400-(1100 pizza×8 ounce per pizza))Material Quantity Variance=$180 U

Material spending variance

Material Spending Variance= Material Price Variance+ Material Quantity Variance Material Spending Variance=$188 F+$180 UMaterial Spending Variance= $8 F

Answer 23

3.

Expert Solution

Answer 24

3.

Expert Solution

Answer 25

Expert Solution

Answer 26

To determine

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

The material price variance, quantity variance, and spending variance for June of Mo cheese.

Answer 27

Answer to Problem 1E

The material price variance is $188 Favorable, quantity variance is $180 Unfavorable, and spending variance is $8 Favorable for June of Mo cheese.

Answer 28

Explanation of Solution

Material price variance

Material Price Variance= Actual Quantity (Actual Price- Standard Price)Material Price Variance=$2,632(9,400×$0.30)Material Price Variance=$188 F

Material quantity variance

Material Quantity Variance= Standard Price×( Actual Quantity Used- Standard Quantity for actual production)Material Quantity Variance=$0.30×(9,400-(1100 pizza×8 ounce per pizza))Material Quantity Variance=$180 U

Material spending variance

Material Spending Variance= Material Price Variance+ Material Quantity Variance Material Spending Variance=$188 F+$180 UMaterial Spending Variance= $8 F

Answer 29

Ch. IE - Activity Variance, Spending Variance, Materials...Ch. IE - Prob. 2E Ch. IE - Prob. 3E Ch. IE - Capital Budgeting, Return on Investment, Residual...Ch. IE - Prob. 6E Ch. IE - Cost-Volume-Profit Relationships, Variable Costing...

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