1. The CEO of Star Coffee is interested in reviewing the May 2014 performance re
ID: 2504379 • Letter: 1
Question
1. The CEO of Star Coffee is interested in reviewing the May 2014 performance report for Cost Center 7-11. Prepare a brief performance report for the CEO utilizing the following information for Cost Center 7-11. Line items should be broken out between direct materials, direct labor, variable overhead, and fixed overhead.
Actual Results
Flexible Budget
Master Budget
Ground coffee
$1,350
$1,200
$1,270
Flavored syrups
2,300
2,320
3,000
Milk
850
800
950
Servers' wages
3,500
3,800
3,600
Supervisor's salary
5,000
5,000
5,000
Espresso machine repair
50
120
150
Please show explination, work
Actual Results
Flexible Budget
Master Budget
Ground coffee
$1,350
$1,200
$1,270
Flavored syrups
2,300
2,320
3,000
Milk
850
800
950
Servers' wages
3,500
3,800
3,600
Supervisor's salary
5,000
5,000
5,000
Espresso machine repair
50
120
150
Explanation / Answer
Actual Results
Variance
Flexible Budget
Variance
Master Budget
Direct materials
$ 4,500
$180 (U)
$ 4,320
$900 (F)
$ 5,220
Direct labor
3,500
300 (F)
3,800
200 (U)
3,600
Variable overhead
50
70 (F)
120
30 (F)
150
Fixed overhead
5,000
--
5,000
--
5,000
Total cost
$13,050
$190 (F)
$13,240
$730 (F)
$13,970
Actual Results
Variance
Flexible Budget
Variance
Master Budget
Direct materials
$ 4,500
$180 (U)
$ 4,320
$900 (F)
$ 5,220
Direct labor
3,500
300 (F)
3,800
200 (U)
3,600
Variable overhead
50
70 (F)
120
30 (F)
150
Fixed overhead
5,000
--
5,000
--
5,000
Total cost
$13,050
$190 (F)
$13,240
$730 (F)
$13,970
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