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Raging Sage Coffee is a franchise that sells cups of coffee from a...

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Accounting

Raging Sage Coffee is a franchise that sells cups of coffee from a cart in shopping centres. A computerised standard costing
system is provided as a part of the franchise package. A portion of the standard cost data follows.
In its first month of operation, the Launceston franchise recorded the following data:
The entity's policy is to record materials price variances at the time materials are purchased.
Required
(a) Are direct labour hours for the cart most likely fixed or variable? Explain.
(b) Given your answer to part (a), should a direct labour efficiency variance be calculated? Why?
(c) Calculate the direct materials price and efficiency variances.
(d) How many cups of coffee did the franchise owners expect to sell this period? Compare this estimate to the amount actually
sold.
(e) Provide possible explanations for the drop in sales.
(f) Suppose the clerks/brewers currently receive a bonus based on their ability to control costs as measured using cost
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