1. Kappa Restaurant

Scenario: Standard Costing and Variance Analysis

Data: Kappa Restaurant set standard costs for one of its popular dishes as follows:

• Standard quantity: 10 units per batch
• Standard cost per unit: $5
• Actual quantity used: 12 units per batch
• Actual cost per unit: $6

Requirements:

1. Calculate the materials price variance and materials quantity variance.
2. Determine whether the variances are favorable or unfavorable.
3. Discuss the causes of materials variances at Kappa Restaurant.
4. Analyze the impact of materials variances on Kappa Restaurant's cost control.
5. Evaluate Kappa Restaurant's use of standard costing for cost management.
6. Recommend strategies to improve materials management and cost efficiency.