Question

Betty’s Bakery has the following standard cost sheet for one unit of its most popular cake:...

Betty’s Bakery has the following standard cost sheet for one unit of its most popular cake:

SQ SP Direct materials 1.2 pounds $ 1.50 per pound

Direct labor 0.8 hours $ 12.00 per hour

During the month of May, the company made 880 cakes and incurred the following actual costs. Direct materials purchased and used (1,300 pounds) $1,690 Direct labor (940 hours) $10,810 Required: 1. Calculate the direct materials price variance. 2. Calculate the direct materials quantity variance. 3. Calculate the direct materials variance. 4. Calculate the direct labor rate variance. 5. Calculate the direct labor efficiency variance. 6. Calculate the direct labor spending variance.

Homework Answers

Answer #1

Materials Price Variance = (SP-AP)*AQ

= (1.50-1690/1300)*1300

= 260 Favourable

Materials Quantity Variance = (SQ-AQ) * SP

= (880*1.2 - 1,300)*1.50

= 366 Unfavorable

Materials Quantity Variance = 260 F + 366 U

= 106 Unfavorable

Labor Rate Variance = (SR-AR)*AH

= (12-10810/940)*940

= 470 Favourable

Labor efficiency variance = (SH-AH) *SR

= (880*0.8-940)*12

= 2832 Unfavorable

Labor spending variance = 470 F + 2832 U

= 2362 Unfavorable

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