Aunt Molly's Old Fashioned Cookies bakes cookies for a chain of retail stores. The company's best-selling cookie

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Aunt Molly's Old Fashioned Cookies bakes cookies for a chain of retail stores. The company's best-selling cookie is Chocolate Nut Supreme, which is marketed as a gourmet cookie and regularly sells for $9.60 per kilogram. The standard input cost per kilogram of Chocolate Nut Supreme, based on Aunt Molly's normal monthly production of 400,000 kilograms, is calculated as follows:

Aunt Molly's Old Fashioned Cookies bakes cookies for a chain

Aunt Molly's management accountant, Karen Blair, prepares monthly budget reports based on these standard costs. Presented here is April's report, which compares budgeted and actual performance.

Aunt Molly's Old Fashioned Cookies bakes cookies for a chain

Required
1. Compute the following variances:
a. Selling-price variance.
b. Material-rate variance.
c. Material-efficiency variance.
d. Labour-rate variance.
e. Labour-efficiency variance.
2. What explanations might exist for the variances in requirement 1?

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Cost Accounting A Managerial Emphasis

ISBN: 978-0133138443

7th Canadian Edition

Authors: Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham

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