Question

Dog Bone Bakery, which bakes dog treats, makes a special biscuit for dogs. Each biscuit uses 0.75 cup of pure semolina flour. They buy 4,000 cups of flour at $0.55 per cup. They use 3,550 cups of flour to make 4,750 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? Round your answers to two decimals. Enter all amounts as positive numbers.

Direct materials price variance	$	Unfavorable
Direct materials quantity variance	$	Favorable
Total direct materials cost variance	$	Unfavorable

B. What is the standard cost per biscuit for the semolina flour? Round your answer to four decimals.

$

Answer 1

Answer:

A

Calculate direct material price variance, quantity variance, and total direct material variance as follows:

Actual cups of flour used to make 4,750 biscuits = 3,550 cups

Actual price = $0.55 per cup

Standard cups of flour required to maker 4,750 biscuits = 4,750 x 0.75 = 3,562.50 cups

Standard price = $0.54

Now,

Direct material price variance = (Standard price - Actual price) x Actual quantity

= ($0.54 - $0.55) x 3,550 cups

   = $35.50 Unfavorable

Direct material quantity variance = (Standard quantity - Actual quantity) x Standard price

= (3,562.50 cups - 3,550 cups) x $0.54

= $6.75 Favorable

Total direct material cost variance = (Standard quantity x Standard price) - (Actual quantity x Actual price)

= (3,562.50 cups x $0.54) - ($3,550 cups x $0.55)

= $28.75 Unfavorable

B

Calculate the standard cost per biscuit for the semolina flour as follows:

Standard cost = Standard cost per cup of flour x Flour required to make single biscuit

=$0.54 x 0.75

= $0.4050 per biscuit.