Curly’s manufactures the bags of Frozen French fries used at its franchised restaurants. Last week, Curly’s purchased and used 99,000 kg of potatoes at a price of $0.70 per kilogram. During the week, 2,300 direct labour hours were incurred in the plant at a rate of $12.30 per hour. The standard price per kilogram of potatoes is $0.90 and the standard direct labour rate is $12.05 per hour. Standards indicate that for the number of bags of frozen fries produced, the factory should have used 97,000 kg of potatoes and 2,200 hours of direct labour.
Requirements
1. What is the standard cost per pan of gourmet bars?
2. What is the standard gross profit per pan of gourmet bars?
3. How often should Barrie’s Bakery reassess the standard quantities and standard prices for inputs?
4. Could the explanation for the labour variances be tied to the material variances? Explain.