Reference no: EM132565404

Do you have Acc-350, critical thinking 23-1 Decision case. the question is: Suppose you manage the local Snoopy's ice cream parlor. In addition to selling ice cream cones, you make large batches of a few flavors of a few flavors of milk shakes to sell through out the day. Your parlor is choosen to test the company's "Made - for - you " system. This new system enables patrons to customize their milk shakes by choosing different flavors.

Customers like the new system and your staff appears to be adapting, but you wonder whether this new made a few large batches. Efficiency is a special concern because your performance is evaluated in part on the restaurant's efficient use of materials and labor. Your superiors consider variance greater than 5% to be unacceptable.

You decide to look at your sales for a typical day. You find that the parlor used 390 pounds of ice cream and 72 hours of direct labor to produce and sell 2,000 shakes. The standard quantity allowed for a shake is 0.2 pounds of ice cream and 0.03 hours of direct labor. The standard cones are 1.50 per pound for ice cream and $8c per hour for labor.

Question 1: Compute the efficiency variance for direct labor and direct materials.

Question 2: Provide likely explanations for the variance. Do you have reason to be concerned

Question 3: Write a memo to Snoopy's national office explaining your concern and suggesting a remedy.