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Flexible Budgeting and Variance Analysis I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning

Flexible Budgeting and Variance Analysis

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 11 lb. 8 lb. $5.4
Sugar 9 lb. 13 lb. 0.6
Standard labor time 0.4 hr. 0.5 hr.

Dark Chocolate Light Chocolate
Planned production 4,900 cases 13,600 cases
Standard labor rate $15 per hr. $15 per hr.

I Love My Chocolate 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) 4,700 14,100
Actual Price per Pound Actual Pounds Purchased and Used
Cocoa $5.5 165,300
Sugar 0.55 220,000
Actual Labor Rate Actual Labor Hours Used
Dark chocolate $14.6 per hr. 1,710
Light chocolate 15.4 per hr. 7,230

Required:

Prepare the following variance analyses for both chocolates and total, based on the actual results and production levels at the end of the budget year:

  1. Direct materials price variance, direct materials quantity variance, and total variance.
  2. 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. If there is no variance, enter a zero.

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 $

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