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Business, 25.11.2019 19:31 DiiegoWasHere

Determining unit costs, variance analysis, and interpretation
big dog company, a manufacturer of dog food, produces its product in 1,000-bag batches. the standard cost of each batch consists of 9,000 pounds of direct materials at $0.40 per pound, 48 direct labor hours at $8.50 per hour, and variable overhead cost (based on machine hours) at the rate of $10 per hour with 16 machine hours per batch. the following variable costs were incurred for the last 1,000-bag batch produced:

direct materials 9,300 pounds costing $3,578 were purchased and used
direct labor 45 hours costing $450
variable overhead $225
machine hours used 18 hours
(a) determine the actual and standard variable costs per bag of dog food produced, separated into direct materials, direct labor, and variable overhead.

round your answers to 3 decimal places.
(b) for the last 1,000-bag batch, determine the standard cost variances for direct materials, direct labor, and variable overhead.

round your answers two decimal places.
(c) which of the following is the most likely explanation for an unfavorable labor rate variance and a favorable labor efficiency variance?

-use of higher skilled employees and high efficiency equipment.
-use of poor quality materials resulting in overtime labor.
-use of low efficiency equipment by highly skilled employees.
-use of high efficiency equipment by undertrained employees.

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Determining unit costs, variance analysis, and interpretation
big dog company, a manufacturer...
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