You have been invited to interview for an internship with an international food manufacturing company. When you
Question:
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. 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.
Actual_______________________________________________________
Boxes produced ………………………………………. 10,000
Direct materials used in production ………………….. 2,150,000 g
Actual direct material cost ……………………………. 60,200 euro
Actual direct manufacturing labor-hours ……………... 1,100
Actual direct manufacturing labor cost ………………. 12,650 euro
Standards______________________________________________
Purchase price of direct materials ……………………. 0.03 euro/g
Materials per box …………………………………….. 200 g
Wage rate ……………………………………………. 12 euro/hour
Boxes per hour ………………………………………. 10
Please respond to the following questions as if you were in an interview situation:
Required
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?
Step by Step Answer:
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan