Raging Sage Coffee is a franchise that sells cups of coffee from a cart in...
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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 clerksbrewers currently receive a bonus based on their ability to control costs as measured using cost 
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 clerksbrewers currently receive a bonus based on their ability to control costs as measured using cost
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You can see the logs in the Dashboard.