| Joy of Baking produces and sells a new Tie Dye cake mix. The mix sells for $28 per package, each of which contains individual packages to prepare 5 cakes. |
| Standard unit cost for this product are as follows: ingredients, 6 oz. at $1.00 per ounce; packaging $1.20; direct labor, .8 hours at $14.00 per hour; |
| standard variable overhead, $4.00 per direct labor hour; and standard fixed overhead, $6.40 per direct labor hour. Normal capacity for this product |
| is 46,875 units per week. During the first week of the quarter the company produced 50,000 packages but used materials for 50,200 packages costing $60,240. |
| It also used 305,000 ounces of ingredients costing $292,800. The total cost of direct labor for the week was $579,600; direct labor hours totaled 40,250. |
| Total variable overhead was $161,100 , and total fixed overhead was $242,000. Budgeted fixed overhead for the week was $240,000. |
| On the following tabs: |
| 1 | Prepare a standard cost card for the Tie Dye Cake Mix |
| 2 | Compute the direct materials price and quantity variances, |
| | Direct labor price and quantity variances, |
| | Variable overhead spending and efficiency variances, |
| | and the fixed overhead budget and volume variances. |
| 3 | Prepare a performance report based on your variance analysis, and suggest possible causes for each significant variance. |
knohe_
10_problems.xlsx
