Flexible Budgeting and Variance Analysis Sharon's Delights Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available: Standard Amount Standard Amount Sugar Standard labor time Planned production: per Case Dark Chocolate per Case Light Chocolate Standard Price per Pound 9 lbs. 6 lbs. $4.40 7 lbs. 11 lbs. 0.60 0.4 hr. 0.5 hr. Dark Chocolate 4,400 cases $13.00 per hr. Light Chocolate 10,400 cases $13.00 per hr. Standard labor rate Sharon's Delights Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, Sharon's Delights Chocolate Company had the following actual results: Actual production (cases) Actual Price per Pound $4.50 Sugar 0.55 Dark Chocolate 4,200 Light Chocolate 10,800 Actual Quantity Purchased and Used) 103,100 144,500 Dark Chocolate Light Chocolate Actual production (cases) 4,200 10,800 Actual Price per Pound Actual Quantity Purchased and Used $4.50 103,100 Sugar 0.55 144,500 Actual Labor Rate Actual Labor Hours Used Dark chocolate $12.70 per hr. 1,530 Light chocolate 13.30 per hr. 5,530 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 Favorable infavorable Actual Labor Rate Actual Labor Hours Used Dark chocolate Light chocolate $12.70 per hr. 1,530 13.30 per hr. 5,530 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 If the amounts at 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 l from efficiency and price variances. volumes. The budget must flex with the volume changes. production. In this way, spending from volume changes can be separated