Reference no: EM131296154
The Lucerne Chocolate Company uses standard costs and flexible budget to control its manufacture of fine chocolate. The purchasing agent is responsible for material price variances, and the production manager is responsible for all other variances. Operating data for the past week are summarized as follows:
Finished units produced: 2,900 boxes of chocolates
Direct materials: Purchased and used, 3,400 pounds of chocolate at 17.3 Swiss Franks (CHF) per pound; standard price in CHF 18 per pound. Standard allowed per box produced 1 pound.
Direct labor: Actual costs, 3,925 hours at CHF 38.6 or CHF 151,505. Standard allowed per box produced is 1.25 hours. Standard price per direct hour is CHF 38
Variable manufacturing overhead: Actual costs, CHF 46,675. Budget formula in CHF 11 per standard direct-labor hour.
Compute the following:
a. Material purchase price variance
b. Material quality variance
c. Direct-labor price variance
d. Direct-labor quantity variance
e. Variable manufacturing overhead spending variance
f. Variable manufacturing overhead efficiency variance
2. a. What is the budget allowance for direct labor?
b. Would it be any different if production were 3,900 boxes?
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