The food and beverage manager of the Glitz Hotel just got a great deal on beverages for the bar. Instead of buying large 5L containers for $25 each, they instead were able to purchase 1,000 cases of 12-packs of 500ml cans for $26,640. Beverages are served in 500ml servings. Usually, they sell 800 beverages over a weekend, but they actually sold 900 this past weekend. However, 20 customers had to be refunded due to problems with the cans.

Direct labour costs are driven by the number of beverages served. A typical weekend requires four servers each working two 8-hour shifts at $12/hour. At the end of the weekend, actual labour costs were $816.50 for 71 hours.

Required:

A Calculate the following variances:

Material rate

Material quantity

Direct Labour rate

Direct labour efficiency

B Briefly explain the variances to the hotel manager, and explain if the variances are somehow interlinked. Assess the special purchase and identify other factors that should be considered.

Answer rating: 100% (QA)

Required A Calcul ate the following var iances Material rate Material quantity Direct Labour rate Di... View the full answer