e to label any variances as favourable or uties te standard costs (Learning Obje
ID: 2555489 • Letter: E
Question
e to label any variances as favourable or uties te standard costs (Learning Objective 3) Bakery 125mL chopped pecans, 60 mL cocoa, 250 3 eggs, a akes desserts for local restaurants. Each 85 mL oil. Each pan requires 15 minutes of direct labour for mix- the gourmet bars by the pac pan mt0 g sir Bourm $Lans (750 m) $1.80 per bag of chocolate chips (500 mL per bag), $0.84 per Check su Req. 2 is sugar, 125 mL chocolate ckaging. Each pan must bake for 30 minutes. Restaurants purchase utting, ady the pan, not by the individual serving. Each pan is currently sold for are as follows: $1.60 per bag of flour (4 kg in a bag), $3.00 per bag oer bag), $4.38 per tin of cocoa (750 mL per tin), $3.00 per bag of 3.75 5 per bottle of oil (2 L per bottle), and $0.60 for packaging materials. The kg in a bag), standard wage rate is $15 per hour Requirements 2. What is the standard gross profit per pan of gourmet bars? dozen eggs, $1.65 te is $15 per hour. Barrie's Bakery allocates bakery overhead at $5.00 per hour. What is the standard cost per pan of gourmet bars? How often should Barrie's Bakery reassess the standard quantities and standard prices for inputs? 3.Explanation / Answer
Answer to Question Number 1.
Cost of 750gm of flour = ($1.60/4000gm)*750gm = $0.30
Cost of 125 ml Chopped Pecans = ($3/750ml) * 125ml = $0.50
Cost of 60ml Cocoa = ($4.38/750ml) * 60ml = $0.35
Cost of 250gm Sugar = ($3/3750gm) * 250gm = $0.20
Cost of 125ml Chocolate chips = ($1.80/500ml) *125ml = $0.45
Cost of 3 eggs = ($0.84/12 piece) * 3 piece = $0.21
Cost of 85ml Oil = ($1.65/2000 ml) * 85ml = $0.07
Cost of Labour = ($15/60 minutes) * 15 minutes = $3.75
Cost of Packaging = $0.60
Cost of Bakery overhead (oven cost) = ($5/60 minutes) * 30 minutes = $2.50
Therefore total standard cost per pan of gourment bars = $8.93 per pan
Answer to Question Number 2.
Standard cost per pan of gourment bars = $8.93
Sale price per pan = $12
Therefore, standard gross profit per pan of gourment bars = $3.07
Answer to Question Number 3.
In a rapid changing market environment, Barrie's Bakery should reassess the standard quantities and standard prices for inputs as and when there is a change in market scenario. If the input prices goes up, then profit will start decreasing from the current mark of $3.07 per pan.
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