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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 | 9 lb. | 6 lb. | $4.2 | |||
Sugar | 7 lb. | 11 lb. | 0.6 | |||
Standard labor time | 0.3 hr. | 0.4 hr. |
Dark Chocolate | Light Chocolate | |||
Planned production | 5,800 cases | 10,200 cases | ||
Standard labor rate | $16 per hr. | $16 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) | 5,500 | 10,600 | ||
Actual Price per Pound | Actual Pounds Purchased and Used | |||
Cocoa | $4.3 | 113,700 | ||
Sugar | 0.55 | 151,200 | ||
Actual Labor Rate | Actual Labor Hours Used | |||
Dark chocolate | $15.7 per hr. | 1,500 | ||
Light chocolate | 16.3 per hr. | 4,350 |
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