7-37. POSSIBLE CAUSES FOR PRICE AND EFFICIENCYVARIANCES. You have been invited to interview for an internship withan international food manufacturing company. When you arrive for theinterview, you are given the following information related to a fictitiouschocolatier for the month of June. The chocolatier manufactures trufflesin 12-piece boxes. The production is labor intensive, and the delicatenature of the chocolate requires a high degree of skill.ActualBoxes producedDirect materials used in productionActual direct material costActual direct manufacturing labor-hoursActual direct manufacturing labor costStandardsPurchase price of direct materialsDirect materials per boxWage rateBoxes per hour10,00013,000 pounds (lbs.)$78,0002,400$31,200$SA7 per pound0.90 pounds$ 15 per hour6Please respond to the following questions as if you were in an interviewsituation:Required1. Calculate the direct materials efficiency and price variances and thedirect manufacturing labor price and efficiency variances for themonth of June.2. Discuss some possible causes of the variances you have calculated.Can you make any possible connection between the material andlabor variances? What recommendations do you have for futureimprovement?

Direct material variance shows the difference between estimated per unit cost or material and actual…

IANCES. 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 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.

IANCES. 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 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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