Question

Dog Bone Bakery, which bakes dog treats, makes a special biscuit for dogs. Each biscuit uses 0.70 cup of pure semolina flour. They buy 4,100 cups of flour at $0.55 per cup. They use 3,312.5 cups of flour to make 4,750 biscuits. The standard cost per cup of flour is $0.54.

A. What are the direct materials price variance, the direct materials quantity variances, and the total direct materials cost variance? Round your answers to two decimals. Enter all amounts as positive numbers.

Direct materials price variance	$	Unfavorable
Direct materials quantity variance	$
Total direct materials cost variance	$

B. What is the standard cost per biscuit for the semolina flour? Round your answer to four decimals.

$

Answer 1

A.

1. Direct Material Price Variance = Actual Quantity x Actual Price - Actual Quantity x Standard Price

= 4100*.55 - 4100 * .54 = 2255 - 2214 = $41 adverse or unfavourable

2. Direct materials quantity variance =   (Actual Quantity - Standard Quantity) x Standard Price

= (3,312.5 - 3,325) x 0.54 = - $6.75 favourable

Standard quantity for 4750 biscuit = 4,750 x 0.7 = 3,325

3. Total direct materials cost variance = Standard Quantity for Actual Output xStandard Price - Actual Quantity x Actual Price

= 3325 x 0.54 - 3312.5 * 0.55 = 1,795.5 - 1,821.88 = - $26.38 unfavourable

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B.

Standard cost per biscuit for the semolina flour = Standard cost per cup of flour / Standard quantity of flour for each biscuit

= $0.54 / 0.7 = $0.7714