The Rosenbaum Restaurant Group manufactures the bags of frozen French fries used at its franchised restaurants. Last week, Rosenbaum purchased and used 98,000 pounds of potatoes at a price of $0.70 per pound. During the week, 1,700 direct labor hours were incurred in the plant at a rate of $12.20 per hour. The standard price per pound of potatoes is $0.85, and the standard direct labor rate is $11.95 per hour. Standards indicate that for the number of bags of frozen fries produced, the factory should have used 94,000 pounds of potatoes and 1,400 hours of direct labor. Read the requirements. Requi positiv (U). A s favorable or unfavorable. (Enter the variances as abel the variances as favorable (F) or unfavorable Requirements Begin DM price variance 1. Determine the direct materials price and quantity variances. Be sure to label each variance as favorable or unfavorable. 2. Think of a plausible explanation for the variances found in Requirement 1. 3. Determine the direct labor rate and efficiency variances. Be sure to label each variance as favorable or unfavorable. 4. Could the explanation for the labor variances be tied to the material variances? Explain. Deterd DM quantity variance Requirement 1. Determine the direct materials price and quantity variances. Be sure to label each variance as favorable or unfavorable. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variances as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials.) Begin by determining the formula for the price variance, then compute the price variance for direct materials. *( = DM price variance * ( ) = Determine the formula for the quantity variance, then compute the quantity variance for direct materials. = DM quantity variance *( *( = Requirement 2. Think of a plausible explanation for the variances found in Requirement 1. One plausible explanation is that Rosenbaum bought price, which resulted in the price variance. However, because the potatoes were As a result, the manufacturing facility potatoes than standards allow. This accounts for the efficiency variance. Requirement 3. Determine the direct labor rate and efficiency variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variances as favorable (F) or unfavorable (U). Abbreviations used: DL = Direct labor.) Requirement 3. Determine the direct labor rate and efficiency variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variances as favorable (F) or unfavorable (U). Abbreviations used: DL = Direct labor.) Begin wth the the direct labor rate variance. First determine the formula for the rate variance, then compute the rate variance for direct labor. * ( DL rate variance X = Now determine the direct labor efficiency variance. First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. ) = DL efficiency variance *( * ( Requirement 4. Could the explanation for the labor variances be tied to the material variances? Explain. The labor rate and efficiency variances be tied to the material variances. For example, if the material variances were the result of labor in sorting the potatoes. As a result, they would have had to pay purchasing then the factory would use workers
