Question

o You have been invited to interview for an internship with an international food manufacturing company. When you arrive for the interview, you are given the following information related to a fictitious Belgian chocolatier for the month of June. (Click the icon to view the data.) Read the requirements Requirement 1. Calculate the materials efficiency and price variance and the wage and labor efficiency variances for the month of May. In order to calculate the variances complete the following table. (Round your final answer to the nearest whole number. Abbreviation used: aty = quantity.) Actual input aty Actual costs incurred Budgeted price Flexible budget Direct materials Direct labor Now compute the variances and label each amount as favorable (F) or unfavorable (U). The materials efficiency variance is ? Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

Reqiurement-1

Calculation of  materials efficiency and price variance and the wage and labor efficiency variances for the month of June.

	Actual Costs Incurred (Actual Input Qty.×Actual Price)	Actual Input Qty.× Budgeted Price	Flexible Budget (Budgeted Input Qty. Allowed for  Actual Output*budjected price)
Direct Materials	€ 60,200	€ 64,500	€ 60,000
	(Given)	(2,150,000 g*€.03)	(10000*200*€.03)
Direct labour	€ 12,650	€ 13,200	€ 12,000
	(Given)	(1,100 × € 12)	(10,000 × (1/10) × € 12)

	Incurred	Budjected price	Flexible Budget
Direct Materials	€ 60,200	€ 64,500	€ 60,000
Direct labour	€ 12,650	€ 13,200	€ 12,000

Material efficiency varience	€4500U	Flexible budject-budjected price
	(60000-64500)
Material price variance	€4300F	Budjected price- Actual cost incurred
	(€ 64500- 60200)
Labour efficiency varience	€ 1,200 U
	(12000-13200)
Labour price variance	€ 550 F
	(13200-12650)

Requirement 2

The materials price and  efficiency variance could be an indication that the company purchased less expensive ingredients,but at the cost of lower quality , which resulted in higher than standard number of rejected units.The favorable labor price variance suggests that less experienced workers may have worked more hours than more experienced workers.Those workers would have probably worked slower, and their lack of experience may have caused higher than normal rejects or waste.The company should determine the cause of the rejects.The cause could be because of faulty materials,underskilled workers, or a combination of both.Perhaps additional training will help.If rejects are not the problem, employees may be wasting both time and materials.