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Write a memo to HUB managers about how they could benefit from a standard costing system and the issues you believe HUB is facing with the variances you found. Include in your memo the actions you recommend they take. Explain to HUB managers how they could use the information to increase profitability and decrease waste to become more sustainable

Hopworks Urban Brewery (HUB) is a craft brewery in Portland, Oregon. It sells its beer in its brewpub and in cans to local grocery stores. It is registered as a B-Corporation and aims to be a sustainable, community-focused business through building strong relationships within the community. HUB has a costing system with two direct cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labor-hours (DLH). HUB is looking into using a standard cost system and has developed the following standards (one "unit" is a batch of 12 dozen cans of beer). Per Unit 60 pounds at $5 per lb. 2 hours at $13 per hour Standards Direct materials Direct manufacturing labor Manufacturing overhead Variable Fixed Budgeted Fixed costs per month $7 per DLH $5 per DLH $1,250 Actual cost and operating data from January: Direct materials purchased 4,260 pounds at $4.90 per pound Direct materials used 4,200 pounds to produce 60 batches Direct manufacturing labor $2,070 at an average cost of $13.80 Actual fixed manufacturing overhead $1,350 Actual variable manufacturing overhead $1,125

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