Determine the number of lollipops that must be sold

Assignment Help Managerial Accounting

Reference no: EM13165328

RYT (aka RotYourTeeth) Candy Company sells lollipops.

Last year the company sold 10,000,000 lollipops for $1,000,000.

The Variable Costs were $350,000 and the Net Profits were $100,000

Administration has directed management to double profits in the next year.

Part 1: Determine the Number of lollipops that must be sold to reach this target.

Part 2: Determine the DL and DM budget needed to reach this target.

DM: Cost $1 per pound
Each unit requires 1/50 of a pound
DL: Labor costs are $10 per hour
Each unit requires .0015 labor hours
Part 3: Determine the DL and DM variances and provide explanations to the Board of Directors.
DM: Cost $1.50 per pound , 220,000 pounds used
DL: Cost $12 per hour, 16000 labor hours used

Reference no: EM13165328

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