A Cadbury Creme Egg is an egg$-$shaped chocolate candy that weighs about $35$ grams, or a little more than $1\mathrm{.}2$ ounces.

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Assuming that Cadbury uses standard costing in its manufacturing operations, what variance would have been impacted by the decrease in the cost of the chocolate used in the Cadbury eggs? Would this variance have been favorable or unfavorable? What position or department within Cadbury would have been responsible for that variance?

The $(1)$

variance would have been impacted by the decrease in the cost of the chocolate and it would have been a $(2)$

$(3)$ variance. Normally the

$(4).$ supervisor is responsible for this variance, but the facts state that "the company" changed the ingredient. As a result, the person or group responsible for making the change in the ingredient should be responsible.

$4$: Additional Information

It is filled with a white fondant and a smaller amount of yellow fondant, meant to mimic an actual egg. $($Fondant is a type of sugar syrup.$)$ In the United States, Cadbury Creme Eggs are marketed and distributed by The Hershey Company. The Creme Eggs are produced by Cadbury Adams in Canada and by Cadbury UK in the United Kingdom. In the UK factory, $1\mathrm{.}5$ million Creme Eggs are manufactured per day, Creme Eggs are sold every year from New Year's Day until Easter.

One year Cadbury changed its formula for the eggs by replacing its Cadbury Dairy Milk chocolate with "standard cocoa mix chocolate". The standard chocolate is a less expensive ingredient than the Cadbury Dairy Milk chocolate. The company assured customers that the taste of the Creme Eggs would not change. Consumers reacted negatively to the recipe change. Sales of Cadbury Creme Eggs fell significantly since the chocolate substitution; this drop has been speculated to have been caused by the change in the recipe.

$(1)$

direct labor rate

fixed overhead budget variance

$(2)$

favorable

$(3)$

rate

budget

$(4)$ human resources

direct labor efficiency

fixed overhead volume variance unfavorable

efficiency

volume price production

direct materials price

variable manufacturing overhead efficiency

direct materials quantity

variable manufacturing overhead rate

quantity

purchasing

receiving