Computing Variances and Evaluating Performance. Provide references and or resources used.
Joy of Baking produces and sells a new Tie Dye cake mix. The mix sells for $28 per package, each of which contains individual packages to prepare 5 cakes. Standard unit cost for this product are as follows: ingredients, 6 oz. at $1.00 per ounce; packaging $1.20; direct labor, .8 hours at $14.00 per hour; standard variable overhead, $4.00 per direct labor hour; and standard fixed overhead, $6.40 per direct labor hour. Normal capacity for this product is 46,875 units per week. During the first week of the quarter the company produced 50,000 packages but used materials for 50,200 packages costing $60,240.
It also used 305,000 ounces of ingredients costing $292,800. The total cost of direct labor for the week was $579,600; direct labor hours totaled 40,250.
Total variable overhead was $161,100 , and total fixed overhead was $242,000. Budgeted fixed overhead for the week was $240,000.
On the following tabs:
1 Prepare a standard cost card for the Tie Dye Cake Mix
2 Compute the direct materials price and quantity variances,
Direct labor price and quantity variances,
Variable overhead spending and efficiency variances,
and the fixed overhead budget and volume variances.
3 Prepare a performance report based on your variance analysis, and suggest possible causes for each significant variance.
Attachment:- Computing Variances.xlsx