Harvest Sky Pie Company has a reputation for the best apple pies in Bruce county and surrounding areas Stacy started the company five years ago, baking pies at home, and has experienced wonderful success and growth ever since The company now has three retail outlets located in Meaford, Chatsworth, and Owen Sound, where the pies are sold for $16 along with a selection of vegetables and fruits brought for sale by area farmers In anticipation of continued growth, Stacy decided to no longer do all of the baking herself and has hired two people (Mike and Tom) to help She has an undergraduate degree in accounting and understands the benefits of standard costing Knowing that it would be much more difficult to manage the baking of pies and related costs as a result of having employees involved, Stacy implemented a standard costing system The standard costs are updated monthly The standard cost sheet used for July production (previous month) of pies follows Standard Price Kg Standard Usage Pie Apples $1 50 0 72 kg Brown sugar 2 05 0 18 kg Dough 1 11 0 11 kg Oatmeal 1 90 0 30 kg $ Hour Direct labour 12 80 0 80 hrs Variable overhead 0 68 0 25 hrs Fixed overhead 0 20 0 15 hrs Based on direct labour hours During July, Harvest Sky Pie Company had the following actual production activity Actual production of pies 1,800 Brown sugar was purchased at (per kg) $1 85 Dough was purchased at (per kg) $1 22 Oatmeal was purchased at (per kg) $1 90 Direct labour Direct labour hours total cost $16,835 Direct labour hours used 1,300 Stacy estimates practical activity to be 1,900 units per month Apples are purchased only twice per year, in March and in October The other ingredients are purchased throughout each month Inventory data regarding raw materials for July is provided below Raw Material Beginning Inventory Ending Inventory Inventory Used Apples 7,550 kg 6,325 kg Brown sugar 10 kg 5 kg 615 kg Dough 35 kg 45 kg 195 kg Oatmeal 8 kg 5 kg 438 kg Stacy is very happy with her new hires Mike brought an apple pie to the hiring interview with Stacy to have her sample the product of his family pie recipe Mike, beaming with pride, told Stacy that this recipe has won many awards at fall fairs over many years Stacy tasted the pie and found it extremely sweet, having in her opinion far too much brown sugar Over the month of July, Stacy thought she had noticed that the pies prepared by Mike were the first to sell out each day and was surprised to find that pie sales were more than 200 units higher than in June Required Stacy has set a control limit of plus or minus $10 on each of the raw material inputs, for both the individual price and usage variances Calculate the price and usage quantity variances for each raw material, and determine which variances should be further investigated (Ignore labour and overhead variances for this question)

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Harvest Sky Pie Company has a reputation for the best apple pies in Bruce county and surrounding areas. Stacy started the company five years ago,

Harvest Sky Pie Company has a reputation for the best apple pies in Bruce county and surrounding areas. Stacy started the company five years ago, baking pies at home, and has experienced wonderful success and growth ever since. The company now has three retail outlets located in Meaford, Chatsworth, and Owen Sound, where the pies are sold for $16 along with a selection of vegetables and fruits brought for sale by area farmers. In anticipation of continued growth, Stacy decided to no longer do all of the baking herself and has hired two people (Mike and Tom) to help. She has an undergraduate degree in accounting and understands the benefits of standard costing. Knowing that it would be much more difficult to manage the baking of pies and related costs as a result of having employees involved, Stacy implemented a standard costing system. The standard costs are updated monthly.

The standard cost sheet used for July production (previous month) of pies follows:

	Standard Price/Kg	Standard Usage/Pie
Apples	$1.50	0.72 kg
Brown sugar	2.05	0.18 kg
Dough	1.11	0.11 kg
Oatmeal	1.90	0.30 kg
	$/Hour
Direct labour	12.80	0.80 hrs
*Variable overhead	0.68	0.25 hrs
*Fixed overhead	0.20	0.15 hrs

*Based on direct labour hours.

During July, Harvest Sky Pie Company had the following actual production activity:

Actual production of pies	1,800
Brown sugar was purchased at (per kg)	$1.85
Dough was purchased at (per kg)	$1.22
Oatmeal was purchased at (per kg)	$1.90
Direct labour:
Direct labour hours total cost	$16,835
Direct labour hours used	1,300

Stacy estimates practical activity to be 1,900 units per month. Apples are purchased only twice per year, in March and in October. The other ingredients are purchased throughout each month. Inventory data regarding raw materials for July is provided below.

Raw Material	Beginning Inventory	Ending Inventory	Inventory Used
Apples	7,550 kg	6,325 kg	?
Brown sugar	10 kg	5 kg	615 kg
Dough	35 kg	45 kg	195 kg
Oatmeal	8 kg	5 kg	438 kg

Stacy is very happy with her new hires. Mike brought an apple pie to the hiring interview with Stacy to have her sample the product of his family pie recipe. Mike, beaming with pride, told Stacy that this recipe has won many awards at fall fairs over many years. Stacy tasted the pie and found it extremely sweet, having in her opinion far too much brown sugar. Over the month of July, Stacy thought she had noticed that the pies prepared by Mike were the first to sell out each day and was surprised to find that pie sales were more than 200 units higher than in June.

Required:

Stacy has set a control limit of plus or minus $10 on each of the raw material inputs, for both the individual price and usage variances. Calculate the price and usage/quantity variances for each raw material, and determine which variances should be further investigated. (Ignore labour and overhead variances for this question).