Question 10-29 from Managerial Accounting 10th Canadian edition garrison libby and webb

RO BLEM 10-29 Developing Standard Costs ILOI s a small company that processes wild mushrooms found in the forests of central For many years, Maximes products have had strong sales in France. However compa tes from other countries in Europe, such as Italy and Spain, have begun marketing similar ducts in France, and price competition has become intense. Jean Gauthier, the company's roller, is planning to implement a standard costing system for Maxime and has gathered nsiderable information from the purchasing and production managers concerning produc n and material requirements for Maxime's products. Gauthier believes that the use of stan dar new entrants into the French market d costing will allow Maxime to improve cost control and thereby better compete with the s most popular product is dried chanterelle mushrooms, which are sold in small cuum-packed jars. Each jar contains 15 grams of dried mushrooms. Fresh mushrooms are purchased for 60 per kilogram in bulk from individuals who gather them from local forests stands for euro, the currency used in France.) Because of imperfections in the mushroom normal spoilage, one-quarter of the fresh mushrooms are discarded. Fifteen minutes is the direct labour time required for inspecting and sorting per kilogram of fresh mushrooms. After sorting and inspecting, the acceptable mushrooms are flash-dried. which requires 10 minutes of direct labour time per kilogram of acceptable, sorted, and inspected fresh mushrooms. The flash-drying removes most of the moisture content of the mushrooms and therefore reduces the weight of the acceptable mushrooms by 80%. As a consequence, a kilogram of acceptable fresh mushrooms yields only about 150 grams of dried mushrooms. After drying, the mush va rooms are vacuum-packed in small jars and labels are applied Direct labour is paid at a rate of 12 per hour. The cost of the glass jars, lids, and labels is 10 per 100 jars. The labour time required to pack 100 jars is 10 minutes Required 1. Develop the standard cost for the direct labour and materials cost components of a single jar of dried chanterelle mushrooms, including the costs of the mushrooms, inspecting and sorting, drying, and packing Gauthier wo nders who should be held responsible-the purchasing manager or the pro duction manager-for the following e materials price variances for the chanterelle mushrooms. Explain. the materials quantity variances for the chanterelle mushrooms. Explairn Th ROR nd l abaur Variances; Computations from Incomplete