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 June 2020. The chocolatier manufactures truffles in 12-piece boxes. The production is labor intensive, and the delicate nature of the chocolate requires a high degree of skill.

Required

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 June 2020.
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?

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Actual Boxes produced Direct materials used in production Actual direct material cost Actual direct manufacturing labor-hours Actual direct manufacturing labor cost Standards Purchase price of direct materials Materials per box Wage rate Boxes per hour 12,000 2,640,000 grams €72,500 1,300 €15,360 € 0.029 per gram 200 grams 3 per hour 10 €