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Comprehensive Problem 6: CVP/Budgeting/Variances This problem is-(Answered)

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Comprehensive Problem 6: CVP/Budgeting/Variances

 

This problem is worth 10% of your grade

 

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:

 

DL:

 


 

mmk 4/14/12

 


 

Cost $1.50 per pound , 220,000 pounds used

 

Cost $12 per hour, 16000 labor hours used

 


 

 

Paper#9209466 | Written in 27-Jul-2016

Price : $19
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