The standards for one carton of Flavor Rite are:
Direct material 3.2lbs @ $6lb
Direct labor 2.4hrs @ $10/hr
During the week ended May 17, the following activity took place:
• 4,800 lbs. of raw material were purchased for inventory at a cost of $5.60 per pound;
• 1,200 cartons of finished product were produced;
• 4,020 lbs. of raw material were used;
• 3,110 labor hours were worked at a total cost of $26,435.
Calculate each of the following variances:
(a.) Raw materials purchase price variance.
(b.) Raw materials usage variance.
(c.) Direct labor rate variance.
(d.) Direct labor efficiency variance:
Presented below is the income statement for Ackee Food Center for the month of July:
Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 15 percent.
(a.) Rearrange the above income statement to the contribution margin format.
(b.) If sales increase by 10 percent, what will be the firm's operating income?
(c.) Calculate the amount of revenue required