| Course | ACC 349 Cost Accounting (ACC/349) |
|---|---|
| Week | 2 |
| Paper type | Standard cost and variance analysis paper |
| Length | about 1,054 words, 4 double-spaced pages plus title page and references |
| Format | APA 7 student paper |
| School | University of Phoenix |
| Program | BS in Accounting |
| Updated | September 2026 |
Free sample paper for ACC 349 Week 2
Too Much Cheese, Too Many Hours: Standard Costs and a Full Variance Analysis for One Month at a Composite Frozen Pizza Plant
[Student Name]
University of Phoenix
ACC/349: Cost Accounting
Week 2 Assignment
[Instructor Name]
[Date]
The plant, its standards and all figures are composites written for a model paper; costing methods and research findings come from the sources listed.
A composite food manufacturer runs a frozen pizza plant with two production lines. Each case holds twelve 12-inch pizzas sold to grocery chains and school food service distributors. The plant uses a standard cost system: every input has a price standard and a quantity standard, and actual results are compared with the standards each month. In May, the plant manager received a variance report showing costs about $54,000 over standard. A variance report tells a manager where to look; it does not tell them what went wrong. This paper explains the standards, computes each variance and traces the causes.
The Standard Cost Card
Standards were set last fall by the plant accountant, the production manager and the purchasing manager. Cheese, the most costly input, has a quantity standard of 3.6 pounds per case, based on the recipe plus a normal 2% allowance for spillage on the topping line, and a price standard of $2.40 per pound, based on the purchasing manager's forecast of the dairy market. Direct labor has a standard of 0.25 hours per case at $20 an hour. Variable overhead, mainly power, packaging film and line supplies, is applied at $6 per direct labor hour. Fixed overhead, including plant depreciation, supervision and freezer maintenance, is budgeted at $180,000 a month and applied on a denominator of 30,000 cases, or $6 per case.
Datar and Rajan (2021) distinguish ideal standards, reachable only under perfect conditions, from currently attainable standards that allow for normal waste and downtime. The plant uses attainable standards so that variances signal real problems rather than the gap between reality and perfection.
Actual Results for May
The plant produced 28,000 cases. It bought and used 104,000 pounds of cheese at $2.55 per pound, a total of $265,200. Line workers logged 7,400 hours at an average rate of $20.50, a total of $151,700. Variable overhead was $46,250 and fixed overhead was $183,000.
Materials Variances
The standard quantity of cheese allowed for 28,000 cases is 3.6 pounds times 28,000, or 100,800 pounds. The price variance is the actual quantity times the difference between actual and standard price: 104,000 times $0.15, or $15,600 unfavorable. The quantity variance is the standard price times the difference between actual and standard quantity: $2.40 times 3,200 pounds, or $7,680 unfavorable. Together they equal the $23,280 by which actual cheese cost exceeded the standard cost of $241,920.
Labor Variances
The standard hours allowed for actual output are 0.25 times 28,000, or 7,000 hours. The rate variance is 7,400 actual hours times the $0.50 difference in rate, or $3,700 unfavorable. The efficiency variance is the $20 standard rate times the 400 extra hours, or $8,000 unfavorable. Total labor cost was $11,700 over the standard of $140,000.
Overhead Variances
For variable overhead, the spending variance compares actual cost with the standard rate times actual hours: $46,250 against $44,400, or $1,850 unfavorable. The efficiency variance is the $6 rate times the 400 extra hours, or $2,400 unfavorable. For fixed overhead, the budget variance is $183,000 actual against the $180,000 budget, or $3,000 unfavorable. The volume variance compares the budget with fixed overhead applied to actual output, 28,000 cases at $6, or $168,000, giving $12,000 unfavorable.
In total, the eight variances sum to $54,230 unfavorable.
Tracing the Causes
The price variance has an outside cause. Cheese prices on the commodity market rose sharply in the spring, and the purchasing manager's forecast was too low. The purchasing department is responsible for the variance in the sense of owning the forecast, but it could not have controlled the market. The plant has since discussed a fixed-price contract for part of next year's cheese.
The other large variances share a cause. In late April, maintenance installed a new cheese depositor on Line 2. It was set to drop slightly more cheese than the recipe called for, and it jammed repeatedly in its first two weeks, stopping the line. Extra cheese explains the quantity variance. The stoppages meant workers stood idle or cleared jams, which explains most of the 400 extra labor hours, and because variable overhead is applied by labor hours, the variable overhead efficiency variance followed. The rate variance came from overtime paid to catch up after stoppages.
The volume variance has a different cause. The plant produced 2,000 fewer cases than planned, partly because of the jams and partly because one school distributor delayed an order. A volume variance does not mean fixed costs rose; it means fixed costs were spread over fewer cases.
Responsibility and Actions
The maintenance supervisor is responsible for the depositor's calibration, and the production manager for the response to jams. The equipment vendor has recalibrated the machine, and a daily weight check of topped pizzas now catches overuse within hours instead of at month end. Management by exception means the plant manager's attention should go to these variances, not to the small overhead spending variance. Garrison et al. (2021) suggest investigating variances that are large in dollars or as a percentage of standard, or that recur month after month. By that test, the cheese price variance, about 6% of standard cheese cost, and the labor efficiency variance, about 6% of standard labor, both deserve follow-up, while the $1,850 spending variance, about 4% of a small cost, can wait for the next review. The plant has also asked purchasing to report the cheese market price weekly, so a price surprise of this size is seen in the first week of a month rather than after it closes.
Limits of Standard Costing
Standard costing has critics. Cheatham and Cheatham (1996) argued that traditional standard cost systems can encourage producing for inventory to absorb fixed overhead and can report results too late to help. The plant's own experience supports the second point: a daily weight check found in hours what the monthly report found weeks later. Standards remain useful for budgeting and pricing, but they work best alongside timely physical measures on the floor.
Conclusion
May's $54,230 unfavorable variance came mainly from a commodity price increase and a single miscalibrated machine. Computing each variance correctly was necessary, but the value lay in linking the cheese quantity, labor efficiency and variable overhead efficiency variances to one cause and fixing it.
References
Cheatham, C. B., & Cheatham, L. R. (1996). Redesigning cost systems: Is standard costing obsolete? Accounting Horizons, 10(4), 23-31. https://doi.org/10.2308/ah-9707141999
Datar, S. M., & Rajan, M. V. (2021). Horngren's cost accounting: A managerial emphasis (17th ed.). Pearson.
Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2021). Managerial accounting (17th ed.). McGraw Hill.
What the ACC 349 Week 2 instructions ask
The ACC 349 Week 2 assignment commonly asks students to explain standard costing and compute variances. Typical requirements are to describe how price and quantity standards are set, calculate direct materials price and quantity variances, direct labor rate and efficiency variances and overhead variances, label each as favorable or unfavorable and explain possible causes and who is responsible. Some versions supply a case with standards and actual results; others ask students to create a standard cost card for a product. Many add a discussion of management by exception or of whether standard costing still suits modern manufacturing. Calculations should be shown in full and interpreted, with APA citations of the textbook and any other sources used.
How this ACC 349 Week 2 example is built
A frozen pizza line gives the paper a product with clear physical inputs, cheese, dough and labor on the line, and a plant where fixed overhead is large enough for the volume variance to matter. The paper first builds the standard cost card and explains where each figure came from. Each variance is then computed with its formula and result, grouped by input. The interpretation section is the core: it shows that the cheese quantity variance, the labor efficiency variance and the variable overhead efficiency variance all trace back to one machine problem. The closing sections assign responsibility, list corrective actions and weigh criticisms of standard costing in plants that change products often.
ACC 349 Week 2 grading rubric: where the points go
Marks in the variance week generally depend on correct formulas, correct direction and sensible interpretation. Faculty check that price variances use actual quantities, that quantity and efficiency variances use standard prices and standard quantities allowed for actual output and that each variance is labeled favorable or unfavorable correctly. The standard cost card should be internally consistent. Papers earn higher marks when they connect variances to causes and to the managers who control them, and when they note that variances can interact. A reconciliation of total variance to the difference between actual and standard cost shows care. Organized presentation of figures and APA citations complete the rubric, and misapplied formulas cost the most.
ACC 349 Week 2 help: mistakes to avoid
The most common ACC 349 Week 2 error is computing quantity or efficiency variances against budgeted output instead of the standard allowed for actual output. Multiply the standard per unit by the units actually produced. Another is mixing up favorable and unfavorable when actual cost is lower. Write out each formula before filling in numbers. Students also stop after the calculations; explain what caused each variance and who is responsible, and look for links, since one problem often drives several variances. Note that a favorable price variance from cheaper materials can cause unfavorable usage. Round consistently and reconcile totals. Finally, state what management should do next, not only what happened.
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- ACC 349 Week 4: Budgeting and Inventory Control
- ACC 349 Week 5: Capital Decisions and Performance
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ACC 349 Week 2 questions, answered
What does ACC/349 Week 2 usually ask for?
It usually asks students to explain standard costing and calculate variances for direct materials, direct labor and overhead, then interpret causes and responsibility.
Where can I find a free ACC 349 Week 2 sample paper?
A worked frozen pizza plant example is on this page with all eight variances calculated and explained in margin notes. If you have your own case, send it and the first sample we write for you is free.
How is a materials price variance calculated?
Actual quantity purchased times the difference between the actual price and the standard price. It is unfavorable when the actual price is higher.
What is a fixed overhead volume variance?
It is the difference between budgeted fixed overhead and fixed overhead applied to actual output; it arises when production differs from the volume used to set the rate.
Is standard costing still useful?
Many manufacturers still use it for planning and control, though critics argue that it can reward building inventory and fits poorly where products and processes change often.
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