Tasty Treats

* Direct Labour variance: Unfavourable by $22.000. Again, we need to find out whether this is Price and/or efficiency driven. We know that according to the accountant information, the actual price is $16,4/unit while the Standard price is $16/unit. On the other hand, the Standard Quantity is 14.000 units while the actual Quantity is 246.000/16,4=15.000 units. Therefore:

This was favorable, but the Efficiency Variable was 100,000 unfavorable. This suggest that Competition Bike received a great price, but with the unfavorable Efficiency there were a lot of left over materials suggesting the material might not be the best quality. Direct Labor had a 150,000 Unfavorable Variance, but had a 50,000 favorable Efficiency Variance. The labor cost was up due to the high skill level needed for the bike manufacturing. The 50,000 favorable Efficiency Variance enabled the high skill labor to perform the task very efficiently. The Manufacturing Overhead had a 24,000 unfavorable Price Variance, and a 2426 unfavorable Efficiency Variance. The Advertising Cost had a 5,000 unfavorable Price Variance and a 1246 favorable Efficiency Variance. This suggest that Competition Bike spent more on Advertising in order to boost lagging sales, and the favorable Efficiency Variance shows that even though more was spent than budgeted, the money spent was efficient and worth the increase. The Transportation Out had a 3207 unfavorable Price Variance and a 2400 unfavorable Efficiency Variance. This suggest that Transportation cost were up due to increased fuel cost, and this increase in cost resulted in unfavorable Efficiency Variance due to transporting fewer bikes with increase in fuel cost.

Since material cost is one of the key cost drivers for the production of the units, it is best to take

In production costs variance chart above, Direct labor price variance(sum of direct labor variances of round, square and oval) valued at $14,913, and Oval production cost variance valued at $8,381.

As one would expect, a 2% increase on direct materials will lead to an increase in variable costs and in turn, a decrease in profits and contribution margin. The budget impact of this change equates to ($73,322) which represents a (1.06%) hit to profits and a (0.86%) change in contribution margin. This shows that at this point, small percentage changes in commodity prices have a relatively minor impact on the company’s financial position. However, if commodity prices continue to fluctuate further or if production volumes increase then this may become a more prevalent issue.

Question 1) There is some uncertain information to say that the 2004 promotion profitable. Firstly, both Brown and Janus, the consultant, calculated the variable cost by using two ways. The consultant added all expenses which have administrative cost, manufacturing overhead, advertising / promotion expense, selling expense and direct labor and raw material cost. On the other hand, Brown added only direct labor and raw material cost as a variable cost. Moreover, both of them found the sales without promotion differently. Janus worked with several companies by using a computer-generated model to forecast the number of sales without promotion,

I do agree with you when you stated that every company is different when it comes to labor variances. Some companies do not have a choice in regards to the workers that are used to complete the duties of the company. The labor variances depend on how well managers utilize their workers, and they have to makes sure it does not cause an unfavorable labor efficiency variance. Untrained workers can cause an unfavorable labor variance. Companies have to make sure all workers all properly trained. Companies cannot expect worker who are not properly trained to be able to meet production numbers. There are some employers who will not invest in proper training, and it can cause issues for the company.

Budget development should consider future changes that might influence the operation (Payne-Palacio & Theis, 2015, P.473). Not only budgeting, managers make decisions regarding service, product and performance evaluation in order to provide high-quality service. The active communication within customers and departments, training program and implementation of technology innovation is aimed to ensure the quality of service and product. A good menu design makes the operation more efficient and effective by considering the work process and sanitation in advance. This could help ensure the quality of the

What are the relevant cash flows for General Foods to use in evaluating the Super project? In particular, how should management deal with issues such as:

To perform a break-even analysis, we have made the following assumptions: (a) retail margin= 60%, (b) the additional fixed cost of production per flavor, including advertising, bottling run and sundries, is $10 million and this is assumed to be an annual cost, except the bottling run, (c) a conservative estimate of percentage share of market figure is derived by multiplying the market segment percentages, as well as the age segment percentage for the category > 40 yrs. The percentage = 74% x 62% x 85% x 40% = 16%. We first determine the retail

A variable department manager has many factors to consider when interpreting and analyzing a variance report. Variances can be attributed to factors such as increased or decreased volume, wage increases, cost increases for equipment and cost increases for supplies. Variance reports are a tool that can be utilized to analyze how well a company is doing with meeting current budgetary goals as well as a means for forecasting information for future budgets. In preparing a variance analysis report to be presented to the vice president, the information needs to be simple enough to understand easily, but detailed enough for the information to be useful to

7. Though numbers given in the cost data can not be contested, I would definitely contest the way total cost has been computed. The item 345 department operates within a large manufacturing facility that churns out number of other products too. Hence judging the profitability of item 345 on the basis of total cost is not practical.

The information used to calculate the total direct material and total direct labor variances are retrieved from the cost/ price variance and efficiency variance data. The material variance is zero, meaning there have been no changes for the cost of materials. The labor variance was favorable due to a fall in the labor rate. The efficiency variance for direct labor tells management how efficient the direct labor was in making the actual output that was produced by the direct labor. With that being said, in this case it is considered unfavorable. This is because, both the labor rate and efficiency of the labor has been reduced. The areas that should be reviewed at Peyton Approved include product design, reduction of scrap,

The cost of raw materials impacted the actual profit through the price variance and the quantity variance of the direct materials. Using the level 3 analysis, it was determined that the price variance was favorable €46 and the quantity variance was unfavorable €17 which represented a flexible budget variance of favorable €29. This impacts the profit because the Italian region was very efficient with their costs of direct materials, but the Italian region came up short in their manufacturing efficiencies as they experienced an

There are quite a number of financial statements that are associated with the the food and beverage production and services system. These financial statements includes sales records, standard amount and the actual amount of foods and beverages that the establishment sells. The variance analysis is a good tool for planning and enables an establishment to have a grasp of the current costs of food items. Every food service manager must be concerned with the cost of foods including the cost related to the