You own a bakery and make cakes. Your budget for 2014 anticipates output (sales in units) of 1,000 cakes. You believe you will charge $30 per cake. The budget contains these standards for direct materials and direct labor: Direct materials Direct labor 2 pounds $3 per pound = $6 0.5 hours $20 per hour = $10 $16 At the end of 2014 you have sold 800 cakes at an average cost of $25 per cake. You purchased 1,800 pounds of cake batter (direct materials) for $4,500. The bakers spent 60 hours and you paid them $9,000 in wages ($15 per hour).