Bayou Barbecue Inc

question 27

Essay

Bayou Barbecue Inc.in the US bottles and sells barbecue sauce.In the current year,the company had expected to sell 500 000 bottles but actually bottled and sold 600 000 bottles.The standard direct materials cost for each bottle is $.36 comprised of 12 ounces of material at a cost of $.03 per ounce.During the year,7 800 000 ounces of material was purchased out of which 7 350 000 ounces were used at a cost of $.035 per ounce.
Required: Compute each of the following variances.Indicate whether the variance is favourable (F)or unfavourable (U).
A. Direct materials price variance
B. Direct materials usage variance

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Definitions:

Property Rights

Legal rights to possess, use, and dispose of assets.

Political Engagement

The active participation of individuals in political activities or processes to influence public policy or decision-making.

Public Good

An item or service delivered at no cost to all individuals in a society, facilitated by either public authorities or a charitable organization or person.

Rival in Consumption

A characteristic of a good where its consumption by one person reduces its availability for another person.