Question

i Data Table Requirements The chocolatier manufactures truffes in 12-piece boxes. The production is labor intensive, and the delicate nature of the chocolate requires a high degree of skil Please respond to the following questions as if you were in an interview situation: 1. Calculate the materials efficiency and price variance and the wage and labor efficiency variances for the month of June. 2. Discuss some possible causes of the variances you have calculated. Can you make any possible connection between the material and labor variances? What recommendations do you have for future improvement? Actual Boxes produced Direct materials used in production Actual direct material cost Actual direct manufacturing labor-hours Actual direct manufacturing labor cost 10,000 2,150,000 g 60,200 euro 1,100 12,650 euro Print Done Standards Purchase price of direct materials Materials per box Wage rate Boxes per hour 0,03 eurosig 2009 12.00 euro/hour

thats the wholw question and information

Answer 1

Need to calculate material variance + Manufacturing labour Variance less
Material variance
Actual material cost Euro		60,200	A
Actual Direct material used in production (G)			21,50,000	B
Standard price of Direct material =0.03 euros/g				B1
Actual Quantity * Budgeted Price ( B*B1)				64,500	C
Direct material Price Variance(A-C) Euro			4,300	Favorable
(60200-64500 ) EURO= 4300
Budget
Actual Boxes produced		10,000
Standard price of Direct material =0.03 euros/g
Material per Box(g)		200
Flexible Budget=( 10000*200*0.03)=euro			60,000	D
Direct material Efficiency Variance(C-D) Euro			4,500	Unfavorable

Labour variance
Actual Labour cost Euro		12,650	A
Actual Direct Manufacturing Labour Hr (G)			1,100	B
Standard Wage rate (Euro/hr)			12	B1
Actual Hr* Rate ( B*B1)				13,200	C
Direct Labour Price Variance(A-C) Euro			550	Favorable
(12650-13200 ) EURO= 550
Budget
Actual Boxes produced		10,000
Box per Hr		10
Standard Wage rate (Euro/hr)		12
Flexible Budget=( 10000*1/10*12)=euro			12,000	D
Direct Labour Efficiency Variance(C-D) Euro			1,200	Unfavorable

The material price and efficiency variance could be an indication that the company purchased less expensive ingredients of LOW quality. Which resulted in Normal than the standard number of rejected units . The Labour price variance suggested that LESS experience workers may have wroed more , resulting in a SLOW work pace and a MORE than normal amount of rejects or waste