Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

TP makes wedding cakes that are sold to specialist retail outlets, which decorate the cakes according to the customers' specific requirements. The standard cost per

TP makes wedding cakes that are sold to specialist retail outlets, which decorate the cakes according to the customers' specific requirements. The standard cost per unit of its most popular cake is as follows: Direct material: $ Ingredient A 4kg at $25 per kg 100 Ingredient B 3kg at $22 per kg 66 Ingredient C 2kg at $11.50 per kg 23 Direct labour: 3 hours at $12 per hour 36 Variable overhead: 3 hours at $8 per hour 24 Standard cost: 249 The budgeted production for the period was 10,000 units. Actual results for the period were as follows: Production: 9,000 units. Direct material: $ Ingredient A 35,000kg 910,000 Ingredient B 28,000kg 630,000 Ingredient C 27,000kg 296,000 Direct labour: 30,000 hours 385,000 Variable overhead: 230,000

The general market prices at the time of purchase for ingredient A and ingredient B were $23 per kg and $20 per kg respectively. Explain how to go about preparing a statement that reconciles the flexed budget material cost and the actual material cost. Your statement should include the material price planning variances and the operational variances, including material price, material mix and material yield (12 marks).

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_2

Step: 3

blur-text-image_3

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

Managerial Accounting

Authors: James Jiambalvo

7th Edition

1119577721, 978-1119577720

More Books

Students also viewed these Accounting questions