Question

Miller Café budgeted 3,000 covers to be sold for December and the average food cost per...

  1. Miller Café budgeted 3,000 covers to be sold for December and the average food cost per cover is $4.00. The actual sales were 2,900 covers and average food cost per cover is $3.50.
    1. What is the amount of the Budget Variance? Determine the it is favorable or unfavorable. (2 points)
    2. What is the amount of the Cost Variance? Determine it is favorable or unfavorable. (2 points)
    3. What is the amount of the Volume Variance? Determine it is favorable or unfavorable. (2 points)
    4. What is the amount of the Cost-Volume Variance? (1 points)
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Answer #1
A Budget Variance Actual Cost - Budgeted Cost
Budget Variance (2900*3.5)-(3000*4)
Budget Variance -1850 Favorable
B Cost Variance (Actual rate - budgeted rate) * actual qty
Cost Variance (3.5-4)*2900
Cost Variance -1450 Favorable
C Volume Variance (Actual qty - Budgeted qty)* budgeted rate
Volume Variance (2900-3000)*4
Volume Variance -400 Favorable
D Cost volume variance 1850
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