Please describe the circumstances of the following case study and recommend a course of action.

Please Explain how to approach the problem, perform relevant calculations and analysis, and formulate a recommendation.

Ensure the work and recommendation are thoroughly supported.

Case Study:

Papaya Partners is a distributor of papayas. They purchase papayas from individual growers and package them in 10-pound cartons for delivery to their various customers, generally supermarkets. Last month, they budgeted to sell $500,000 worth of cartons at a price of $25 each. Actual sales met a budget of $500,000 at $25 per carton.

Management has received cost information based on actual performance and needs to understand the drivers of the overall variance from the budget. They have asked you, as an analyst in their management accounting department, to calculate and explain the variances. The following data has been provided:

Budget

Cost of fruit @ 10 pounds per carton $200,000

Cost of packaging @ 1 pound per carton $10,000

Labor costs @ .5 hourse per carton $90,000

Total Cost $300,000

Actual

Cost of fruit @ 10 pounds per carton $244,200

Cost of packaging @ .55 pound per carton $11,000

Labor costs @ .75 hourse per carton $150,000

Gross Profit $405,200

Unfavorable variance $105,200.00

Specifically, management needs to know the:

a)Standard cost per unit (carton)

b)Actual cost per unit

c)Direct materials price variances

d)Direct materials usage variances

e)Direct labor rate variance

f)Direct labor efficiency variance

In addition, I would like to understand how the variances are calculated and what caused them. I would also like a recommendation on what might be done to improve the variances.

please explain how I can compute all required amounts and explain how the computations were performed. Describe whom you would work with to determine the causes of the variances and hypothesize on what caused the variances. Based on your analysis, recommend actions that management could take to improve the variances.

Superior papers will:

1)Perform all calculations correctly.

2)Articulate how the calculations were performed.

3)Assess the variances computed and evaluate the operational results (i.e., is performance better or worse than budgeted?).

4)Explain with whom you would work to identify the root causes of the variances.

5)Propose well-thought-out causes for each variance.

6)Conclude on which variances require management's attention and recommend courses of action.