Question

1.) the actual cost of direct materials is $51.30 per kilogram. the standard cost per kilogram is $55.00. during the current period, 7240 kilograms were purchased and used in production. the standard quantity for actual units produced is 7,000 kilograms. how much is the direct materials price variance?

2.) Vonnie's bakery manufactures a specialty cake that is very popular with the local residents. for may, vonnie's bakery budgeted 800 direct labour hours to produce 400 cakes. in may, Vonnie's bakery actually produced 450 cakes and actually used 900 direct labour hours. the standard hours allowed during may would have been closest to:

a.) 711

b.) 800

c.) 900

d.) 1013

Answer 1

Answers:

1.) Direct material price variance = $26,788 Favourable

Explanation:

Information given:

Actual price per unit (AP)= $51.30

Standard price per unit (SP)= $55

Actual Quantity (AQ) = 7240 Kilograms

Direct material price variance = (AP-SP) × AQ

Direct material price variance = (51.30 - 55) × 7240

Direct material price variance = -$26,788

2.)

Answer:

Option c: 900

Explanation:

Budgeted labor hour = 800 hours

Budgeted units (cake) = 400 cakes

Therefore, Standard labor hour per cake = 800 / 400 = 2 hours per cake

Here,

Actual units = 450 cakes

Standard hours allowed = Standard labor hour per cake × number of cakes

Standard hours allowed = 2 × 450

Standard hours allowed = 900 hours