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P10-23 Developing Standard Costs Le Forestier, S.A, is a cesses wild mushrooms found in the forests of central France. For many years, Le Forestier's products have had strong sales in France. However, companies from other countries in the European common ma France, and price competition has become increasingly important. Jean Leveque, the com pany's controller, is planning to implement a standard cost system for Le Forestier and has gathered considerable information from the purchasing and production managers concerning production and material requirements for Le Forestier's products. Leveque believes that the use of standard costing will allow Le Forestier to improve cost control and thereby better compete with the new entrants into the French market. rket such as Italy and Spain have begun marketing similar products in Le Forestier's most popular product is dried chanterelle mushrooms, which are sold in small vacuum-packed jars. Each jar contains 15 grams of dried mushrooms. Fresh mush- rooms are purchased for 300 FF per kilogram in bulk from individuals who gather them from local forests. (FF stands for French francs, and a kilogram is 1,000 grams.) Because of imperfections in the mushrooms and normal spoilage, one-quarter of the fresh mush- rooms are discarded. Fifteen minutes is the direct labor time required for inspecting and sorting per kilogram of fresh mushrooms. After sorting and inspecting, the acceptable mushrooms are flash-dried, which requires 10 minutes of direct labor time per kilogram of acceptable, sorted, and inspected fresh mushrooms. The flash-drying removes mos moisture content of the mushrooms and therefore drastically reduces their weight. A kilo- gram of acceptable fresh mushrooms yields only about 200 grams of dried mushrooms. Af- ter drying, the mushrooms are vacuum-packed in small jars and labels are applied labels is 50 FF per 100 jars. The labor time required to pack 100 jars is 10 minutes. 1. Direct labor is paid at the rate of 60 FF per hour. The cost of the glass jars, lids, and Develop the standard cost for the direct labor and materials cost components of a single jar of dried chanterelle mushrooms, including the costs of the mushrooms, inspecting and sorting, drying, and packing 2. Jean Leveque wonders who should be held responsible-the purchasing manager or the production manager- for the material variances for the chanterelle mushrooms. Who should be held responsible for the material price variances for the chanterelle a. mushrooms? Explain Who should be held responsible for the material quantity variances for the chante- relle mushrooms? Explain b
