Actual Boxes produced Direct materials used in production 10,000 2,150,000 g Actual direct material cost 60,200 euro Actual direct manufacturing labor-hours Actual direct manufacturing labor cost 1,100 12,650 euro Standards 0.03 euro/g Purchase price of direct materials Materials per box Wage rate Boxes per hour 200 g 12 euro/hour 10 Please 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 the month of June. Required 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?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Possible causes for price and efficiency variances. 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 ctitious 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.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
