Question
Yank's produced and sold 30,570 meat pizzas and 2,105 veggie pizzas. the budgeted sales price for meat pizzas was $5 and for veggies $5.25. he
Yank's produced and sold 30,570 meat pizzas and 2,105 veggie pizzas. the budgeted sales price for meat pizzas was $5 and for veggies $5.25. he estimated production and sales during month 12 was 31,678 meat pizzas and 2,595 veggie pizzas. a) compute the price and quantity variances for direct materials for each type of pizza, assuming that yank's paid $29,093 of 32,325 units of raw material for meat pizzas and $1,453 for 2,401 units of raw material for veggie pizzas. also, 30,995 units were used to produce meat pizzas, and 2,149 units were used to produce veggie pizzas. how would these variances be interpreted? what might explain these variances? would you consider them to be large enough to be important? b) compote the labor rate and efficiency variances, assuming that yank's paid $71,350 in labor costs for 7,150 hours of labor for meat pizzas and $6,425 in labor costs for 650 hours of labor for veggie pizzas. how would theses variances be interpreted? what might explain them? would you consider them to be large enough to be important? c) using the predetermined overhead rate of $.06, compute the variable overhead rate and efficiency variances. assume that yank's paid $20,852 in total overhead costs, consisting of $17,002 of variable overhead and $3,850 of fixed overhead. how would these variances be interpreted? what might explain these variances? would you consider them to be large enough to be important?
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