{"id":3768,"date":"2022-03-25T05:04:37","date_gmt":"2022-03-25T05:04:37","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/?post_type=chapter&p=3768"},"modified":"2022-03-25T05:06:42","modified_gmt":"2022-03-25T05:06:42","slug":"module-10-assignment-cost-variance-analysis","status":"web-only","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/chapter\/module-10-assignment-cost-variance-analysis\/","title":{"raw":"Module 10 Assignment: Cost Variance Analysis","rendered":"Module 10 Assignment: Cost Variance Analysis"},"content":{"raw":"This assignment is available for download as a\u00a0Word Document<\/a>.\r\n\r\nRead the following scenario and complete the questions below.\r\n\r\n
\r\n\r\n

Scenario<\/h2>\r\nThe\u00a0entire poultry industry is working hard\u00a0to keep up with demand, but egg production is falling behind. According to the USDA\u2019s Economic Research Service, the price of eggs in the U.S. is expected to rise more than 35 percent in 2018.\u00a0 The cause of this egg price increases? An uptick in foreign demand for US eggs is partly to blame. When the avian influenza devastated Europe this past year, egg suppliers in the U.S. stepped in to help fill the demand in these countries. Another problem arose in late 2017 where some egg supplies were contaminated with a dangerous insecticide, affecting countries including Germany, France and Belgium. With millions of eggs being pulled from the shelves in Europe, US exports of eggs rose 663 percent between 2016 and 2017. Domestic demand has increased as well. In the United States, 2017 saw a 20-year record in egg consumption at 275.2 eggs per person per year. When you multiply that by 325 million Americans, that\u2019s a lot of eggs.\r\n\r\nNow, consider the commercial use of eggs in the production of grocery items such as bread, ice cream, pasta, cakes and waffles. Let\u2019s focus on the Sara Lee\u00ae All Butter Pound Cake\u00ae found in the freezer section of your local grocery store.\u00a0 The first ingredient listed on the package is, you guessed it \u2013 eggs. The pound cake sells for around $3.97 at the grocery store. However, with the price of eggs on the rise, it is likely that $3.97 price may change.\r\n

Questions<\/h2>\r\n
    \r\n \t
  1. Which of Sara Lee\u2019s variances will be affected by the increase in egg prices? Why?<\/li>\r\n \t
  2. Will the increase in egg prices result in favorable or unfavorable variances for Sara Lee? Why?<\/li>\r\n \t
  3. What is Sara Lee\u00ae likely to do to its standards based on this increase in price and which standards will be impacted?<\/li>\r\n \t
  4. What, if anything, can Sara Lee\u00ae do to mitigate the impact of the rising cost of eggs on its manufacturing costs?<\/li>\r\n<\/ol>\r\n ","rendered":"

    This assignment is available for download as a\u00a0Word Document<\/a>.<\/p>\n

    Read the following scenario and complete the questions below.<\/p>\n

    \n

    Scenario<\/h2>\n

    The\u00a0entire poultry industry is working hard\u00a0to keep up with demand, but egg production is falling behind. According to the USDA\u2019s Economic Research Service, the price of eggs in the U.S. is expected to rise more than 35 percent in 2018.\u00a0 The cause of this egg price increases? An uptick in foreign demand for US eggs is partly to blame. When the avian influenza devastated Europe this past year, egg suppliers in the U.S. stepped in to help fill the demand in these countries. Another problem arose in late 2017 where some egg supplies were contaminated with a dangerous insecticide, affecting countries including Germany, France and Belgium. With millions of eggs being pulled from the shelves in Europe, US exports of eggs rose 663 percent between 2016 and 2017. Domestic demand has increased as well. In the United States, 2017 saw a 20-year record in egg consumption at 275.2 eggs per person per year. When you multiply that by 325 million Americans, that\u2019s a lot of eggs.<\/p>\n

    Now, consider the commercial use of eggs in the production of grocery items such as bread, ice cream, pasta, cakes and waffles. Let\u2019s focus on the Sara Lee\u00ae All Butter Pound Cake\u00ae found in the freezer section of your local grocery store.\u00a0 The first ingredient listed on the package is, you guessed it \u2013 eggs. The pound cake sells for around $3.97 at the grocery store. However, with the price of eggs on the rise, it is likely that $3.97 price may change.<\/p>\n

    Questions<\/h2>\n
      \n
    1. Which of Sara Lee\u2019s variances will be affected by the increase in egg prices? Why?<\/li>\n
    2. Will the increase in egg prices result in favorable or unfavorable variances for Sara Lee? Why?<\/li>\n
    3. What is Sara Lee\u00ae likely to do to its standards based on this increase in price and which standards will be impacted?<\/li>\n
    4. What, if anything, can Sara Lee\u00ae do to mitigate the impact of the rising cost of eggs on its manufacturing costs?<\/li>\n<\/ol>\n

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