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

Required:

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.

The variance analysashi

materials and direct labor that wild be based on the

amounts

production. In this way, spending from volume changes can be separated from efficiency and price variances.

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