Session 19 Solutions

Session 19 Solutions - Example: (Similar to Problem 7-41)...

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Example: (Similar to Problem 7-41) Aunt Molly’s Old Fashioned Cookies bakes cookies for retail stores. The company’s best selling cookie is marketed as a gourmet cookie and regularly sells for $8 per pound. The standard cost per pound , based on normal monthly production of 400,000 pounds is given below: SI × SP ($/lb) SP ($/unit of input) SI (units of input/lb) 0.84 0.60 18.00/hr. 2 min. Baking $0.24 14.40/hr. 1 min. Mixing Direct manufacturing labor 1.45 0.50 0.50/oz. 1oz. Almonds 0.75 0.15/oz. 5oz. Milk chocolate $0.20 $0.02/oz. 10oz. Cookie mix Direct materials Total Standard Cost Standard Unit Costs Quantity Cost Item
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18.00 / hr 14.40 / hr .50 / oz .20 / oz .02 / oz AP Actual Cost/unit Input Usage Report, May, 2009 AO × AI × AP AO × AI 240,000 800,000 min Baking 108,000 450,000 min Mixing Direct manufacturing labor 240,000 480,000 oz. Almonds 532,000 2,660,000 oz. Milk chocolate $93,000 4,650,000 oz. Cookie mix Direct materials Actual Costs Quantity Cost Item Performance Report, May, 2009: 50,000 F 400,000 450,000 Units (in pounds) Variance Budget Actual The information presented below relates to cookie production for May, 2009.
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Derive the variances for direct materials and direct manufacturing labor costs for May, 2009.
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First, let’s derive the static and the flexible production cost budgets for direct materials and direct labor and compare them with the actual costs incurred. 450 lbs
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This note was uploaded on 10/06/2010 for the course FNCE 100 taught by Professor Jaffe during the Spring '10 term at UNC Asheville.

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Session 19 Solutions - Example: (Similar to Problem 7-41)...

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