1. Chocolate cake is one product produced by Andy’s Bakery, located in Toronto. Coco, flour, and sugar are used in the ratio of 2:4:1 to produce a chocolate cake.

Coco is budgeted at $ 1.45 per kg, flour is budgeted at $0.40 per kg, and sugar at $0.55 per kg. Andy’s Bakery purchased 220,000 Kg of Coco at $1.42 per Kg, 60,000 kg of flour at $0.44 per kg, and 100,000 kg of sugar at $0.53 per kg.

Andy’s bakery used 200,000 kg of cocoa, 50,000 kg of flour, and 100,800 kg of sugar to produce 350,000 kg of chocolate cake. Every 100 Kgs of cake requires .30 hours of supervisor time and 1.20 hours of employee mixing time.

Supervisors are paid $40 per hour and employee mixers are paid $ 20 per hour. To produce chocolate cake Andy’s bakery staff worked a total of 5,550 hours (1,200 worked by supervisors and 4,350 worked by employee mixers) to produce 350,000 kg. Total salaries of $115,775 were paid to produce 350,000 kg (Supervisors

$ 33,000 and employee mixers $82,775).

Required:

1. Compute labour rate and efficiency variances for supervisor and for technicians.
2. Compute mix and yield labour variances for supervisor and for technicians.
3. Compute material price and efficiency variances for each ingredient
4. Compute mix and yield material variances for each ingredient
5. Explain why the variances may have happened?