Suppose you manage the local Scoopy's ice cream parlor. In addition to selling ice eream cones, you make large batches of a few flavors of milk shakes to sell throughout the day. Your parlor is chosen to test the company's "Made-for-You" system. This new system enahles patrons to customize their milk shakes by choosing different flavon. Customers like the new system and your staff appears to be alapting, but you wonder whether this new made-to-order system is as efficient as the old system in which you just made a few lange hatchea. Iifficiency is a special concem because your performance is evaluated in part on the restauran's efficient use of materials and labor. Your superion consider efficiency variances greater than 5% to be unacceptahie. You decide to look at your sales for a typical day. You find that the parlor used 390 pounds of ice cream and 72 hours of direce babor to produce and sell 2,000 shakex. The standard quantity allowed for a shake is 0.2 pound of ice cream and 0.03 hour of direc labor. The standard costs are $1.50 per pound for ice eream and $8 per hour for bloor. Requirements 1. Compute the efficiency variances for direet labor and direet materiak. 2. Provide likely explanaions for the variances. Do you have reason to be concerned about your performance evaluation? Ixplain. 3. Wrise a memo to Scoopy' national office explaining your concern and supgesting a remedy. Suppose you manage the local Scoopy's ice cream parlor. In addition to selling ice eream cones, you make large batches of a few flavors of milk shakes to sell throughout the day. Your parlor is chosen to test the company's "Made-for-You" system. This new system enahles patrons to customize their milk shakes by choosing different flavon. Customers like the new system and your staff appears to be alapting, but you wonder whether this new made-to-order system is as efficient as the old system in which you just made a few lange hatchea. Iifficiency is a special concem because your performance is evaluated in part on the restauran's efficient use of materials and labor. Your superion consider efficiency variances greater than 5% to be unacceptahie. You decide to look at your sales for a typical day. You find that the parlor used 390 pounds of ice cream and 72 hours of direce babor to produce and sell 2,000 shakex. The standard quantity allowed for a shake is 0.2 pound of ice cream and 0.03 hour of direc labor. The standard costs are $1.50 per pound for ice eream and $8 per hour for bloor. Requirements 1. Compute the efficiency variances for direet labor and direet materiak. 2. Provide likely explanaions for the variances. Do you have reason to be concerned about your performance evaluation? Ixplain. 3. Wrise a memo to Scoopy' national office explaining your concern and supgesting a remedy
