5.

I Love My Chocolate Company makes chocolate and light chocolate. Both products require cocoa and sugar. The following planning Information has been made available: Cocoa Standard Amount per Case Dark Chocolate Light Chocolate 11 8 lbs 9 lbs 13 lbs 0.4 hr. 0.5 hr. Standard Price per Pound $4.40 0.60 Sugar Standard labor time Dark Chocolate Light Chocolate Planned production 3,900 cases 12,200 cases Standard labor rate $13.00 per hr $13.00 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 Light Chocolate Actual production (cases) 3,700 12,700 Actual Price per Pound Actual Pounds Purchased and Used Cocoa $4.50 143,000 Sugar 0.55 193,400 Actual Labor Rate Actual Labor Hours Used Dark chocolate $12.60 per her 1,350 Light chocolate 13.40 per hr 6,510 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 ya a. Direct material price variance, direct materials quantity variance, and total variance Actual Price per Pound Actual Pounds Purchased and Used Cocoa $4.50 Sugar 0.55 Actual Labor Rate 143,000 193,400 Actual Labor Hours Used 1,350 6,510 Dark chocolate Light chocolate $12.60 per hr. 13.40 per hr 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 laborate 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, Direct materials price variance Direct materiais 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 v amounts at volumes. The budget must flex with the volume changes. If the volume is different from the planned volume, as it was in this case, then the budget used for performance evaluation should reflect the change in direct materials and direct labor that will be required for the production. In this way, spending from volume changes can be separated from efficiency and price variances