Managerial Accounting for Victoria Chocolates, Ltd.
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Victoria Chocolates, Ltd., makes premium handcrafted chocolate confections in London. The owner of the company is setting up a standard cost system and has collected the following data for one of the company's products, the Empire Truffle. This product is made with the finest white chocolate and various fillings. The data below pertain only to the white chocolate used in the product (the currency is stated in pounds denoted here as £):
Material requirements, kilograms of white chocolate per dozen truffles 0.81 kilograms
Allowance for waste, kilograms of white chocolate per dozen truffles 0.02 kilograms
Allowance for rejects, kilograms of white chocolate per dozen truffles 0.02 kilograms
Purchase price, finest grade white chocolate £9 per kilogram
Purchase discount 2% of purchase price
Shipping cost from the supplier in Belgium £0.45 per kilogram
Receiving and handling cost £0.1 per kilogram
Requirement 1:
Determine the standard price of a kilogram of white chocolate. (Round your answer to 2 decimal places. Omit the "£" sign in your response.)
Standard price £
Requirement 2:
Determine the standard quantity of white chocolate for a dozen truffles. (Round your answer to 2 decimal places.)
Standard quantity kilograms
Requirement 3:
Determine the standard cost of the white chocolate in a dozen truffles. (Round your answer to 2 decimal places. Omit the "£" sign in your response.)
Standard cost £
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy:
Direct materials: 6 microns per toy at $0.32 per micron
Direct labor: 1.4 hours per toy at $6.7 per hour
During July, the company produced 5,100 Maze toys. Production data for the month on the toy follow:
Direct materials: 74,000 microns were purchased at a cost of $0.31 per micron. 35,750 of these microns were still in inventory at the end of the month.
Direct labor: 7,640 direct labor-hours were worked at a cost of $54,244.
Requirement 1:
Compute the direct materials price and quantity variances for July. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)
Material price variance $
Material quantity variance $
Requirement 2:
Compute the direct labor rate and efficiency variances for July. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" sign in your response.)
Labor rate variance $
Labor efficiency variance $
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Solution Summary
Managerial accounting for Victoria Chocolates, Ltd are examined.
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