180 minutes remaining 6 OF 6 QUESTIONS REMAINING Question 2 20 Points Suggested time : 36 minutes Corner Coffee is a franchise that sells cups of coffee from a cart in shopping centres. A computerised standard costing system is provided as a part of the franchise package. A portion of the standard cost data follows. Price Quantity Coffee beans $6 per K& Ing 0.04 kg per cup Clerk/brewer $10 per hour 0.05 hours per cup In its first month of operation, the franchise recorded the following data: Coffee sold 8260 cups Coffee beans used 224 kg Coffee beans purchased 240 kg Questions Filter (6)Cost of coffee beans purchased $1800 Clerk/brewers' total hours 600 hours Clerk/brewers' total wages $6000 The entity's policy is to record materials price variances at the time materials are purchased. Required (a) Are direct labour hours for the cart most likely fixed or variable? Explain. (4 marks) (b) Given your answer to part (a), should a direct labour efficiency variance be calculated? Why? (4 marks) (c) Calculate the total material variance, direct materials price and efficiency variances.(6 marks) (d) How many cups of coffee did the franchise owners expect to sell this period? Compare this estimate to the amou actually sold. (3 marks) (e) Provide possible explanations for the drop in sales