Question

The Feina Club appears to be having some difficulty controlling its food costs. The manage-ment budgeted its cost of goods sold (COGS) as 36.00% of the budgeted food revenues, which is $100,000. However, the actual COGS turn out to be $40,800. Also, the #of plates budgeted and actually served were 15,000 and 16,000, respectively. Therefore, the budgeted cost per unit and the actual cost per unit were $2.40 and $2.55 per plate, respectively. Based on the information given, run a complete variance analysis for COGS by indicating variance conditions for each of the COGS variance components.

Answer 1

Q1 Formulae
Marterial Varriance
1. COGS rate Varrinace	APS*(AC-SC)
2. COGS Quantity Varriance	SC*(APS-SPS)
3. COGS Cost Varriance	(APS*AC)-(SPS*SC)
APS	Actual Plates Served	16,000
AC	Actual Cost Of per unit	$2.55
SC	Standered Cost Of per unit	$2.40
SPS	Standered Plates Served	15,000
1. COGS Rate Varrinace	16000*(2.55-2.40)	2400	Adverse
2. COGS Quantity Varriance	2.40*(16000-15000)	2400	Adverse
3. COGS Cost Varriance	(16000*2.55)-(15000*2.40)	4800	Adverse