Question
Craft Brewery Co. manufactures specialized beer. Each batch requires 4 kilograms of barley and takes .3 hours of direct labour. The standard cost of the
Craft Brewery Co. manufactures specialized beer. Each batch requires 4 kilograms of barley and takes .3 hours of direct labour. The standard cost of the barley used by Craft Brewery is $8 per kilogram and the standard labour cost is $10 per hour. In November, Craft Brewery purchased 15,000 kilograms of barley for $120,750. During the year, the company manufactured 4,000 bottles. Payroll reported a total of 1,480 direct labour hours at a cost of $14,060.
Instructions
a. Calculate the materials price and quantity variances and indicate whether the variances are favourable or unfavourable.
b. Calculate the labour price and quantity variances and indicate whether the variances are favourable or unfavourable.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started