The Zurich Chocolate Company uses standard costs and a flexible budget to control its manufacture of fine chocolates. The purchasing agent is responsible for material price variances and the production manager is responsible for all other variances. Operating data for the past week are summarized as follows:

1. Finished units produced: 4,000 boxes of chocolates.

2. Direct materials: Purchased and used, 4,300 pounds of chocolate at 15.5 Swiss francs (CHF) per pound; standard price is CHF 16 per pound. Standard allowed per box produced is 1 pound.

3. Direct labour: Actual costs, 6,400 hours at CHF 30.5 or CHF 195,200. Standard allowed per box produced is 1.5 hours. Standard price per direct-labour hour is CHF 30.

4. Variable manufacturing overhead: Actual costs, CHF 69,500. Budget formula is CHF 10 per standard direct-labour hour.

Compute the following:

1 (a). Materials purchase-price variance.

   (b). Materials quantity variance.

   (c). Direct-labour price variance.

   (d). Direct-labour quantity variance.

   (e). Variable manufacturing-overhead spending variance.

   (f). Variable manufacturing-overhead efficiency variance.

  (For format, see the solution to the ‘Summary problem for your review’, p. 352.)

2 (a). What is the budget allowance for direct labour?

   (b). Would it be any different if production were 5,000 boxes?