Candy Company sells lollipops.

Last year the company sold 10,000,000 lollipops for $1,000,000.

The Variable Costs were $350,000 and the Net Profits were $100,000

Administration has directed management to double profits in the next year.

1: Determine the Number of lollipops that must be sold to reach this target.

2: Determine the DL and DM budget needed to reach this target.

DM ........Cost $1 per pound

Each unit requires 1/50 of a pound

DL ........Labor costs are $10 per hour

Each unit requires .0015 labor hours

3: Determine the DL and DM variances and provide explanations to the Board of Directors.

DM ........Cost $1.50 per pound, 220,000 pounds used

DL ........Cost $12 per hour,