EXERCISE#1-STANDARD COST Cadbury Company makes cupcakes gourmet which are sold b

Question

EXERCISE#1-STANDARD COST Cadbury Company makes cupcakes gourmet which are sold by the dozen. The company uses the following standards for their cupcakes: Standard materials quantity: Standard labor: Factory overhead: 4.25 cups of ingredients at $0.56 per cup 1.10 hours at $8.30 per hour $3.80 per direct labor hour Instructions: Calculate the standard cost of a dozen cupcakes, according to established standards EXERCISE #2-Price Variance/ Quantity Variance / Cost Variance E-furniture Company produces a Chair that requires 5 yards of material per unit. The standard price of a yard of material is S7.50. During the month, manufactured 8,500 chairs, using 43,600 yards at a cost of S7.55 per yard. Istructions: Determine (a) Price variance (b) Quantity variance (c) Cost Variance Identify if the quantities are favorable(pro) or Unfavorable.

Explanation / Answer

1 Direct materials 2.38 =4.25*0.56 Direct labor 9.13 =1.1*8.3 Overhead 4.18 =3.8*1.1 Total standard cost 15.69 2 a Price variance 2180 Unfavorable =43600*(7.55-7.5) b Quantity variance 8250 Unfavorable =7.5*(43600-8500*5) c Cost variance 10430 Unfavorable =(43600*7.55)-(8500*5*7.5)

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