=+12-43 K Non-financial variances OBJECTIVES 3, 8 Daisy Canine Products produces high-quality dog food distributed only through
Question:
=+12-43 K Non-financial variances OBJECTIVES 3, 8 Daisy Canine Products produces high-quality dog food distributed only through veterinary surgeries. To ensure that the food is of the highest quality and has taste appeal, Daisy Canine Products has a rigorous inspection process. For quality control purposes, Daisy Canine Products has a standard based on the kilograms of food inspected per hour and the number of kilograms that pass or fail the inspection.
Daisy Canine Products expects that for every 15000 kilograms of food produced, 1500 kilograms of food will be inspected.
Inspection of 1500 kilograms of dog food should take 1 hour. Daisy Canine Products also expects that 6% of the food inspected will fail the inspection. During the month of May, Daisy Canine Products produced 3300000 kilograms of food and inspected 277500 kilograms of food in 215 hours. Of the 277500 kilograms of food inspected, 15650 kilograms of food failed to pass the inspection.
Required 1 Calculate two variances that help determine whether the time spent on inspections was more or less than expected. (Follow a format similar to the one used for the variable overhead spending and efficiency variances, but without prices.)
2 Calculate two variances that can be used to evaluate the percentage of the food that fails the inspection.
Step by Step Answer:
Cost Accounting A Managerial Emphasis
ISBN: 9781442563377
2nd Edition
Authors: Monte Wynder, Madhav V. Rajan, Srikant M. Datar, Charles T. Horngren, William Maguire, Rebecca Tan