Reference no: EM132423428

Super Ubar ltd has been successful in gaining a major contract to Ubar deliver meals to university students in Melbourne. These operations were previously managed by the chef legend, and the services were outsourced as a cost saving measure. Super Ubar tendered a low price, so it is very focused on cost control. The following standard prices have been established for some major food ingredients.

Item                 Standard price

Chicken Roast     15 per kg

Fish fillets            $22 per kg

Chips                   $10 per kg

Mixed vegies    $10 per kg

Super Ubar purchases the prepared food frozen in 10 kg. container, and kitchen staff produce a range of standard meals. Two popular meals are the chicken dinner and the fish dinner. The standard quantities used in these two meals are as follows

Chicken dinner                         Fish dinner

Lamb roast      200 grams       fish fillets    350 grams

Mixed vegies    250 grams       Chips           300 grams

Chips              150 grams

During August, the company produced 500 chicken dinners and 800 fish dinners purchase and usages data for the major material ingredients during March follow

Items                   Purchase in March                            Used in

                            Quantity (kg)      $per kg               Production (kg)

Chicken roast                 250                   16.80                  105

Fish fillets                      170                    25.20                  300

Chips                            300                    10.00                  320

Mixed vegies                  300                    10.80                  120  

Required

(i) Calculate the total direct material quality variance and price variances for March.

(ii) Prepare journal entries to record the purchase of material, use of Material and incurrence of variances in March.