90.2K

Verified Solution

Link Copied!

In order to properly track costs, Sweet Wave Bakery uses very stringent standard costs in evaluating efficiency. Management is working hard to make these costs precise, but they have not yet achieved this goal. Currently, they use the following standards:

Materials
Item	Per Unit	Cost
Flour	1 lb.	$.63 per pound
Sugar	12 oz.	$1.00 per pound
Butter	4 oz.	$.88 per pound
Direct Labor
Item	Per Unit	Cost
Labor	15 min.	$8.00 per hour
Predetermined overhead rate based on direct labor hours $4.28

The January figures for purchasing, production, and labor are:

The company purchased 229,000 pounds of raw materials in January at a cost of 78 a pound.

Production used 229,000 pounds of raw materials to make 115,500 units in January.

Direct labor spent 18 minutes on each product at a cost of $7.80 per hour.

Overhead costs for January totaled $54,673 variable and $73,800 fixed.

Instructions: Answer the following questions about standard costs.

B.	What is the materials quantity variance?
	Standard quantity: Units produced x Total pounds per unit
	Actual Quantity	x	Standard Price	Equals
	Standard Quantity	x	Standard Price	Equals
LESS:
					Favorable/Unfavorable
			Total

Answer & Explanation Solved by verified expert

See Answer