Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Delicious Donuts makes and sells custom donuts, which it plans to sell for $2 each. For 20X1, Delicious planned to order 10,000 lbs of flour
Delicious Donuts makes and sells custom donuts, which it plans to sell for $2 each. For 20X1, Delicious planned to order 10,000 lbs of flour at $0.50/lb to make the 100,000 donuts it planned for the year (that's.1 lbs/unit). The company also planned to pay bakers $ 10/hour to make donuts; it is estimated that each donut requires 3 minutes to make (that's 0.05 hours). The actual performance of the company was slightly different than planned. Donuts sold for $1.75/each, and Delicious was able to sell 125,000 donuts. The company used 11,000 lbs of flour to make those donuts at a cost of $0.60/lb. The labor cost Delicious exactly $10/hour as it had expected, but each donut took 6 minutes to make (that's 0.10 hours). What is the Direct Materials Price Variance
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