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Gemiola [76]
3 years ago
7

Dog Bone Bakery, which bakes dog treats, makes a special biscuit for dogs. Each biscuit uses 0.75 cup of pure semolina flour. Th

ey buy 4,000 cups of flour at $0.55 per cup. They use 3,588 cups of flour to make 4,800 biscuits. The standard cost per cup of flour is $0.54. A. What are the direct materials price variance, the direct materials quantity variances, and the total direct materials cost variance
Business
1 answer:
Marizza181 [45]3 years ago
3 0

Answer:

Results are below.

Explanation:

<u>To calculate the direct material rate and quantity variance, we need to use the following formulas:</u>

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (0.55 - 0.54)*4,000

Direct material price variance= $40 favorable

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (0.75*4,800 - 3,588)*0.55

Direct material quantity variance= $6.6 favorable

<u>Finally, the total variance:</u>

Total direct material variance= 40 + 6.6= $46.6 favorable

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Bargain Electronics would realize Net Income of $35,200 by accepting the special order.

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