the hershey chocolate company uses standard costs and a flexible budget to contr

Question

the hershey chocolate company uses standard costs and a flexible budget to control its manufacture of fine chocolates. 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: Finish units produced: 2900 boxes of chocolate Direct Materials: Purchased and used, 3400 pounds of chocolate at 17.3 swiss francs per pound; standard price is 18 per pound. Standard allowed per box is 1 pound. Direct labor: Actual Costs, 3925 hours at 38.6 francs or 151,505. Standard allowed per box produced is 1.25 hours. Standard price per direct labor hour is 38 francs. Variable Manufacturing overhead: Actual Costs, 46,675. Budget Formula is 11 francs per standard direct labor hour. Compute: Materials Purchase - Price Variance Materials quantity variance Direct labor price variance Direct labor quantity variance.

Explanation / Answer

Particulars Standard Actual Qty Rate amount Qty Rate amount Materials              2,900.00                    18.00            52,200.00              3,400.00                    17.30            58,820.00 Labour              3,625.00               38.0000         137,750.00              3,925.00                    38.60         151,505.00 Actual output              2,900.00 Materials reqd(2,900*1)              2,900.00 Labour hrs reqd(2900 * 1.25)              3,625.00 DMPV = (SP-AP)*AQ DMPV = (18 - 17.30)3,400 DMPV = 2,380 F DMQV= (SQ-AQ)SP DMQV= (2,900 - 3,400)18 DMQV= 9,000 U DLRV= (SR-AR)AH DLRV= (38 - 38.60)3,925 DLRV= 2,355 U DLEV = (SH-AH)SR DLEV = (3,625 - 3,925)38 DLEV = 11,400 U

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