Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The food and beverage manager of the Glitz Hotel just got a great deal on beverages for the bar.Instead of buying large 5L containers for

The food and beverage manager of the Glitz Hotel just got a great deal on beverages for the bar.Instead of buying large 5L containers for $25 each, they instead were able to purchase 1,000 cases of 12-packs of 500ml cans for $26,640.Beverages are served in 500ml servings.Usually, they sell 800 beverages over a weekend, but they actually sold 900 this past weekend.However, 20 customers had to be refunded due to problems with the cans.

Direct labour costs are driven by the number of beverages served.A typical weekend requires four servers each working two 8-hour shifts at $12/hour.At the end of the weekend, actual labour costs were $816.50 for 71 hours.

A)Calculate the following variances:

Material rate

Material quantity

Direct Labour rate

Direct labour efficiency

B)Briefly explain the variances to the hotel manager, and explain if the variances are somehow interlinked.Assess the special purchase and identify other factors that should be considered.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield

13th Edition

9780470374948, 470423684, 470374942, 978-0470423684

More Books

Students also viewed these Accounting questions

Question

What three factors determine cash flows?

Answered: 1 week ago

Question

What are the two items whose sum is the price of equity capital?

Answered: 1 week ago