Grand Canyon Food Products is famous for its frosted fruit cake
The main ingredient of the cake is dried fruit, which Grand Canyon purchases by the pound. In addition, the production requires a certain amount of direct labor. Grand Canyon uses a standard cost system, and at the end of the first quarter, there was an unfavorable direct materials efficiency variance. Which of the following is a logical explanation for that variance?
A) The production manager negotiated a lower wage package for production staff, bringing direct labor costs down.
B) The factory lost two experienced workers at the beginning of the quarter, and their replacements wasted a large amount of dried fruits during their training period.
C) The purchasing manager was able to secure a volume discount on dried fruit, purchasing the fruit for less than the amount set by standard.
D) The production staff changed the work flow process so that production required fewer direct labor hours.
B
You might also like to view...
A market opportunity is viable and attractive if:
A. The firm has the marketing communications skills needed to reach that market B. There are enough potential customers in that market for the needed product so that the total potential sales volume will be substantial C. The opportunity is consistent with the mission and objectives of the company D. The firm has the financial and human resources needed to reach that market E. All of the above conditions are met
Mini-CaseThe Xer-Wise Corporation manufactures and markets high quality home exercise equipment. The firm has just developed a new piece of equipment that top executives believe will be a big seller if promoted correctly. The new product uses a system of adjustable weights that can be arranged in various ways to allow the user to perform exercises that tone all major muscle groups. Additionally, unlike other strength building machines, this equipment also incorporates a recumbent bicycle to provide a complete cardio workout.
The entire piece of equipment is easy to assemble, and when not in use it can be folded into a compact unit that is easy to store. A group of fitness experts have tested the equipment and have provided rave reviews. Company executives believe that this product, called the MuscleMaster, will appeal to busy young adults living in relatively small apartments. Melody Fitt and Tom Trym have been assigned the responsibility of developing a promotion mix for this product. The team of Fitt and Trym is convinced that they can develop a successful promotion mix for this outstanding product. Xer-Wise markets and promotes its products to consumers online. Melody and Tom are considering a more aggressive approach to generate enthusiasm for the MuscleMaster over the Internet. They have discussed offering young adults free T-shirts and special discounts on Xer-Wise equipment if they will agree to hype the benefits of the MuscleMaster on Facebook. They are even considering setting up a program in which customers get commissions for directing friends to the Xer-Wise website. If they adopt these strategies, Tom and Melody would be utilizing A. extended reach marketing. B. unified marketing. C. secondary marketing. D. viral marketing.