Calculate the budgeted quantity of flour cakes ltd needs

Assignment Help Financial Accounting

Reference no: EM133265180

Question: Cakes Ltd runs a small bakery. It sells birthday cakes. Based on its production budget, it will need to produce 5,000 cakes next year. Cakes Ltd needs 2 kilograms (kg) of flour to produce each cake. The expected cost of flour is $1.50/kg. It does not have any required ending inventory. However, its beginning inventory constitutes 1,000 kg of flour.

a. Calculate the budgeted quantity of flour Cakes Ltd needs to purchase.

Suppose we are now in 2022. Cakes Ltd actually purchases 12,000 kg of flour at a cost of $1/kg.

b. Calculate the total variance in flour purchase cost for Cakes Ltd.

c. Comment on whether the variance obtained in part b is adverse or favorable.

d. Describe THREE (3) potential causes for the total variance in flour purchase cost in part c.

Reference no: EM133265180

Questions Cloud

What are the key budgetary priorities : What are the key budgetary priorities and issues for each government and Compare the budgetary trends described in the two budgets. How are the trends similar

Prepare the appropriate journal entry to record : Prepare the appropriate journal entry to record the disposition of the office equipment

Explain the differences author anzia yezierska sees : Describe that struggle in detail, and explain the differences author Anzia Yezierska sees between the "Old" and "New" worlds

How will you react to this finding : ACC 4 & 6A University of Santo Tomas functions were consolidated and integrated. How will you react to this finding? What SPECIFIC/STEP BY STEP audit procedures

Calculate the budgeted quantity of flour cakes ltd needs : FINANCE OUBAS1200 Open University of Mauritius Calculate the budgeted quantity of flour Cakes Ltd needs to purchase.

Discuss legislature in the development of derivative actions : Created from the strict application of the rule in Foss v Harbottle and the approach of the courts and legislature in the development of derivative actions.

Write summary regarding any article related to ethics : Write 250 words summary regarding any article related to Ethics in Health Care. Anything that is impacting the Health Care in your Community/City/Country

Identify the functions and goals of financial management : FINANCE 434 United Arab Emirates University Identify the functions and goals of financial management, apply the tools and methods of financial ratio analysis

How can a business ensure that its risk assessment : How can a business ensure that its risk assessment exercises are effective despite the challenges? Are there any risks that companies can safely ignore?

User Account

All Pages