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Jack and Andrew Company manufactures two types of snack products; Taro Chips and Corn Chips. Both products are made in the same way but with different packaging and brands. The following are financial data that occurred at Jack and Andrew Company related to the production and sales of Taro Chips and Corn Chips during the year 20X1: Budget 20X1 Variable Cost/unit Amount Sold Realization 20X1 Sales price/unit Variable Cost/unit Amount Sold Sales price/unit Product Taro Chips 10 Corn Chips 7.5 5.5 4 500,000 unit 10.1 750,000 unit 7.75 5.75 3.7 504,300 unit 725,700 unit Actual Realization Number of units produced 12,000 Raw materials used in product 2,640,000 raw material cost 72,500 number of direct labor hours 1,300 direct labor cost 15,360 variable oh cost 65,205 fixed oh cost 72,200 standard cost & quantity raw material cost ($/gr) 0.029 raw mterials used in the products (gr) 200 direct labor cost/hours worked ($/er) 13 number of units produced/hours worked 10 variable oh cost 64,400 fixed oh cost 70,400 Jack and Andrew Company sells both products in the West Java area. For 20x1 budget reporting, Jack and Andrew Company assumes it has 12.5% market share based on all sales in the West Java region. The total sales of chips throughout West Java for the 20x1 period itself is predicted to be worth 10,000,000 units. However, the realization of sales in Java during 20x1 turned out to be 12,300,000 units. The following is information regarding the variance that occurred at Jack and Andrew Company during the 20x1 period: Sales Variance (in $) Taro Chips Corn Chips Sales volume variance 19,350 F 85,050 U sales mix variance 55,350 F 43,050 U sales quantity variance 36,000 U 42,000 U market share variance 1,199,250 U 1,199,250 U market size variance 1,121,250 F 1,121,250 F Cost Variance (in $) Direct material price variance direct material usage variance direct labor rate variance direct labor efficiency variance variable overhead spending variance variable overhead efficiency variance fixed overhead spending variance fixed overhead volume variance 4,060 F 6,960 U 1,540 F 1,300 U 2,415 F 2,220 V 1,800 U 3,200 F The accounting department of Jack and Andrew Company made a variance analysis report addressed to the directors of Jack and Andrew with a note that the company's condition this year was not good or financial performance was deteriorating. As one of the lead expert staff, you are asked to analyze all variance conditions at Jack and Andrew Company. Give an explanation of the causes of the variance and how it affects the company's finances. Question Do you agree with the statement of the accounting department of Jack and Andrew Company? Explain (15%) Jack and Andrew Company manufactures two types of snack products; Taro Chips and Corn Chips. Both products are made in the same way but with different packaging and brands. The following are financial data that occurred at Jack and Andrew Company related to the production and sales of Taro Chips and Corn Chips during the year 20X1: Budget 20X1 Variable Cost/unit Amount Sold Realization 20X1 Sales price/unit Variable Cost/unit Amount Sold Sales price/unit Product Taro Chips 10 Corn Chips 7.5 5.5 4 500,000 unit 10.1 750,000 unit 7.75 5.75 3.7 504,300 unit 725,700 unit Actual Realization Number of units produced 12,000 Raw materials used in product 2,640,000 raw material cost 72,500 number of direct labor hours 1,300 direct labor cost 15,360 variable oh cost 65,205 fixed oh cost 72,200 standard cost & quantity raw material cost ($/gr) 0.029 raw mterials used in the products (gr) 200 direct labor cost/hours worked ($/er) 13 number of units produced/hours worked 10 variable oh cost 64,400 fixed oh cost 70,400 Jack and Andrew Company sells both products in the West Java area. For 20x1 budget reporting, Jack and Andrew Company assumes it has 12.5% market share based on all sales in the West Java region. The total sales of chips throughout West Java for the 20x1 period itself is predicted to be worth 10,000,000 units. However, the realization of sales in Java during 20x1 turned out to be 12,300,000 units. The following is information regarding the variance that occurred at Jack and Andrew Company during the 20x1 period: Sales Variance (in $) Taro Chips Corn Chips Sales volume variance 19,350 F 85,050 U sales mix variance 55,350 F 43,050 U sales quantity variance 36,000 U 42,000 U market share variance 1,199,250 U 1,199,250 U market size variance 1,121,250 F 1,121,250 F Cost Variance (in $) Direct material price variance direct material usage variance direct labor rate variance direct labor efficiency variance variable overhead spending variance variable overhead efficiency variance fixed overhead spending variance fixed overhead volume variance 4,060 F 6,960 U 1,540 F 1,300 U 2,415 F 2,220 V 1,800 U 3,200 F The accounting department of Jack and Andrew Company made a variance analysis report addressed to the directors of Jack and Andrew with a note that the company's condition this year was not good or financial performance was deteriorating. As one of the lead expert staff, you are asked to analyze all variance conditions at Jack and Andrew Company. Give an explanation of the causes of the variance and how it affects the company's finances. Question Do you agree with the statement of the accounting department of Jack and Andrew Company? Explain (15%)

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