Reference no: EM132781113

Question - Purina produces its product in 500-bag batches. Assume the standard batch consists of 10,000 pounds of direct materials at $0.25 per pound, 16 direct labor hours at $15 per hour, and variable overhead cost (based on machine hours) at the rate of $20 per hour with 10 machine hours per batch. The following variable costs were incurred for the last 500-bag batch produced:

Direct materials 10,250 pounds costing $2,255 were purchased and used

Direct labor 15 hours costing $231

Variable overhead $215

Machine hours used 9.5 hours

Required -

a. Determine the actual and standard variable costs per bag of dog food produced, separated into direct materials and direct labor.

b. For the last 500-bag batch, determine the standard cost variances for direct materials and direct labor.