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ah0This problem is worth 10% of your grade RYT (aka RotYourTeeth) Candy Company sells lollipops. Last year the company sold 10,000,000 lollipops for...

CVP/Budgeting/Variances

ah0This 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: Cost $1.50 per pound , 220,000 pounds used DL: Cost $12 per hour, 16000 labor hours used mmk 4/14/12
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