I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and...
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I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available: Standard Amount per Case Dark Chocolate Light Chocolate Standard Price per Pound Cocoa Sugar 10 lbs. 7 lbs. $4.90 8 lbs. 12 lbs. 0.60 Standard labor time 0.4 hr. 0.5 hr. Planned production Standard labor rate Dark Chocolate Light Chocolate 4,700 cases $16.50 per hr. 12,900 cases $16.50 per hr. I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, I Love My Chocolate Company had the following actual results: Dark Chocolate Actual production (cases) Light Chocolate 4,500 13,400 Actual Price per Pound Actual Pounds Purchased and Used Cocoa Sugar $5.00 139,500 0.55 191,900 Actual Labor Rate Actual Labor Hours Used Dark chocolate $16.00 per hr. 17.00 per hr. 1,640 6,870 Light chocolate Required: 1. Prepare the following variance analyses for both chocolates and the total, based on the actual results and production levels at the end of the budget year: a. Direct materials price variance, direct materials quantity variance, and total variance. b. Direct labor rate variance, direct labor time variance, and total variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Direct materials price variance Direct materials quantity variance Total direct materials cost variance b. Direct labor rate variance Direct labor time variance Total direct labor cost variance 2. The variance analyses should be based on the materials and direct labor that will be required for the amounts at volumes. The budget must flex with the volume changes. If the production. In this way, spending from volume changes can be separated from efficiency and price variances. volume is different from the plan I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available: Standard Amount per Case Dark Chocolate Light Chocolate Standard Price per Pound Cocoa Sugar 10 lbs. 7 lbs. $4.90 8 lbs. 12 lbs. 0.60 Standard labor time 0.4 hr. 0.5 hr. Planned production Standard labor rate Dark Chocolate Light Chocolate 4,700 cases $16.50 per hr. 12,900 cases $16.50 per hr. I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, I Love My Chocolate Company had the following actual results: Dark Chocolate Actual production (cases) Light Chocolate 4,500 13,400 Actual Price per Pound Actual Pounds Purchased and Used Cocoa Sugar $5.00 139,500 0.55 191,900 Actual Labor Rate Actual Labor Hours Used Dark chocolate $16.00 per hr. 17.00 per hr. 1,640 6,870 Light chocolate Required: 1. Prepare the following variance analyses for both chocolates and the total, based on the actual results and production levels at the end of the budget year: a. Direct materials price variance, direct materials quantity variance, and total variance. b. Direct labor rate variance, direct labor time variance, and total variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Direct materials price variance Direct materials quantity variance Total direct materials cost variance b. Direct labor rate variance Direct labor time variance Total direct labor cost variance 2. The variance analyses should be based on the materials and direct labor that will be required for the amounts at volumes. The budget must flex with the volume changes. If the production. In this way, spending from volume changes can be separated from efficiency and price variances. volume is different from the plan
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Related Book For
Financial and Managerial Accounting
ISBN: 978-1285078571
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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