- The company Environmental plastics S.A.S. manufactures plastic products, inside which is the school lunch box reference A-25. This article has a projected production of 10,000 units during April of this year. The FOC are applied based on the hours of Hours of Direct Labor and the standard costs of each lunch box are as follows:
|
RESOURCE |
QUANTITY |
COST |
|
Raw Materials (Polypropylene) |
0,75 Kilos |
$250 / Kilo |
|
Direct Labor |
0,1 Hours |
$3.500 / Hour |
|
FOC Fixed |
$400 / Hour of Direct labor |
|
|
FOC Variables |
$350 / Hour of Direct labor |
|
A supplier sold a lower quality material (recycled polypropylene with impurities), which does not affect the quality or technical specifications of the product and therefore is a transparent decision for the customer, but this fact was the only cause that caused the following Results: The company produced 10,000 units that had been budgeted for the month of April, which used 7.750 kilograms of polypropylene purchased at $ 240 per kilogram, were used 1.050 hours of Direct Labor paid at $ 3.500 per hour and the FOC Actuals were $ 1.420.000.
|
Calculate and interpret all variations |
