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RYT 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    






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