Possible causes for price and efficiency variances. You have been invited to interview for an

internship with an international food manufacturing company. When you arrive for the interview, you

are given the following information related to a fictitious Belgian chocolatier for the month of June.

The chocolatier manufactures truffles in $12-$piece boxes. The production is labor intensive, and the

delicate nature of the chocolate requires a high degree of skill.

Actual

Boxes produced $10,000$

Direct materials used in production $2,150,000$ g

Actual direct material cost $60,200$ euro

Actual direct manufacturing labor$-$hours $1,100$

Actual direct manufacturing labor cost $12,650$ euro

Standards

Purchase price of direct materials $0\mathrm{.}03$ euro$/$g

Materials per box $200$ g

Wage rate $12$ euro$/$hour

Boxes per hour $10$

Please respond to the following questions as if you were in an interview situation:

Required:

$1.$ Calculate the materials efficiency and price variance and the wage and labor efficiency variances

for the month of June.

$2.$ Discuss some possible causes of the variances you have calculated. Can you make any possible

connection between the material and labor variances? What recommendations do you have for

future improvement?