RYT (aka RotYourTeeth) Candy Company sells lollipops. Last year the company sold 10,000,000 lollipops for \$1,000,000. The Variable Costs were \$350,000 and the Net Profits were \$100,000 Administrat

RYT (aka RotYourTeeth) Candy Company sells lollipops.

Last year the company sold 10,000,000 lollipops for \$1,000,000.

The Variable Costs were \$350,000 and the Net Profits were \$100,000

Administration has directed management to double profits in the next year.

Part 1: Determine the Number of lollipops that must be sold to reach this target.

Part 2: Determine the DL and DM budget needed to reach this target.

DM: Cost \$1 per pound

Each unit requires 1/50 of a pound

DL: Labor costs are \$10 per hour

Each unit requires .0015 labor hours

Part 3: Determine the DL and DM variances and provide explanations to the Board of Directors.

DM: Cost \$1.50 per pound , 220,000 pounds used

DL: Cost \$12 per hour, 16000 labor hours used

ATTACHMENT PREVIEW

RYT
(aka RotYourTeeth) Candy Company sells lollipops.
Last year the company sold 10,000,000 lollipops for \$1,000,000.
The Variable Costs were \$350,000 and the Net Profits were \$100,000
Administration has directed management to double profits in the next year.
Part 1:
Determine the Number of lollipops that must be sold to reach this target.
Part 2:
Determine the DL and DM budget needed to reach this target.
DM:
Cost \$1 per pound
Each unit requires 1/50 of a pound
DL:
Labor costs are \$10 per hour
Each unit requires .0015 labor hours
Part 3:
Determine the DL and DM variances and provide explanations to the Board of
Directors.
DM:
Cost \$1.50 per pound ,
220,000 pounds used
DL:
Cost \$12 per hour,
16000 labor hours used
mmk
4/14/12