# Question: The Lucerne Chocolate Company uses standard costs and a flexible

The Lucerne Chocolate Company uses standard costs and a flexible budget to control its manufacture of fine chocolates. The purchasing agent is responsible for material price variances, and the production manager is responsible for all other variances. Operating data for the past week are summarized as follows:
1. Finished units produced: 2,900 boxes of chocolates.
2. Direct materials: Purchased and used, 3,400 pounds of chocolate at 17.3 Swiss francs (CHF) per pound; standard price is CHF 18 per pound. Standard allowed per box produced is 1 pound.
3. Direct labor: Actual costs, 3,925 hours at CHF 38.6, or CHF 151,505. Standard allowed per box produced is 1.25 hours. Standard price per direct-labor hour is CHF 38.
4. Variable manufacturing overhead: Actual costs, CHF 46,675. Budget formula is CHF 11 per standard direct-labor hour.
Compute the following:
1. a. Materials purchase-price variance
b. Materials quantity variance
c. Direct-labor price variance
d. Direct-labor quantity variance
2. a. What is the budget allowance for direct labor?
b. Would it be any different if production were 3,900 boxes?

View Solution:

Sales12
Views256