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You are excited about your future prospects. You created budgets three months ago and now it is time to measure your actual costs and volume against your budgets. You decide to evaluate direct materials and direct labor variances to measure actuals against 1st Quarter budgets. The tables below depict the actuals for January, February, and March. Perform direct materials and direct labor evaluations and discuss what may be causing any variances.

Sales Actuals
		Q1
Actual sales		37,000
Actual, average selling price per dozen		$ 15.64
Actual direct material cost		$ 203,354.80
Actual direct labor cost		$ 65,057.93
Total Sales revenue		$ 578,680.00

Production Actuals
		Q1
Budgeted Sales		37,000
Desired Ending Inventory		411
Total Units Needed		37,411
Less: Beginning Inventory		(380)
Required Production		37,031

Materials Actuals
		Q1
Required production		37,031
Raw materials needed
Material	Amt per dz
Flour	0.75	27,773
Butter	0.25	9,258
Sugar	0.57	21,108
Eggs	0.17	6,172
Milk	0.09	3,333
Cocoa Powder	0.25	9,258
Chocolate icing	0.75	27,773
Bakery box	1.00	37,031
Material	Cost per unit
Flour	$ 1.55	$ 43,124.69
Butter	$ 0.84	$ 7,742.71
Sugar	$ 1.13	$ 23,892.78
Eggs	$ 0.82	$ 5,078.22
Milk	$ 1.66	$ 5,543.43
Cocoa Powder	$ 2.95	$ 27,336.74
Chocolate icing	$ 1.88	$ 52,190.72
Bakery box	$ 1.04	$ 38,445.49
Total		$ 203,354.80	$ 5.50
Labor Actuals
				Q1
	Dz/Hr	Actual Time	Hrly Rate	37,031
Mixers	32	1157.22	$ 15.00	$ 17,358.33
Bakers	18	2057.28	$ 16.50	$ 33,945.19
Packers	35	1058.03	$ 13.00	$ 13,754.41
Total				$ 65,057.93
*Actual time based on 1st quarter Required Production listed on this tab

Analysis	Standard Formula	Answer	Favorable / Unfavorable	What does this tell us?
Sample	Actual Price X Actual Quantity	$XXX.00
Direct Materials Price Variances
Direct Materials Quantity Variances
Direct Labor Rate Variance
Mixers
Bakers
Packers
Direct Labor Time Variance
Mixers
Bakers
Packers
1. The Direct Labor Rate Variance and the Direct Labor Time Variance are a summation of the mixers, bakers, and packers.

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