It is December and you have just been hired as an accountant by the Sweetwater Candy Company operating in Fort Collins. Sweetwater is a boutique candy maker that produces only one specialty product: boxes of assorted chocolates that include a regional favorite using Colorado peaches for the filling. These chocolates have become favorites of locals and tourists. The Sweetwater Candy Company produces its chocoates at a small facility in Fort Collins Sweetwater sells each unit for $25 per box. (1 unit = 1 box of chocolates) You have been asked to get involved with the budget preparation for next year and to use the information to make decisions. The budget process is already underway, and the accounting team has worked with the sales and marketing team to develop the following sales budget for next year: $25.00 Selling price per unit Units Dollar Sales January 1,200 $30,000 February 1,000 $25,000 March 1,600 $40,000 April 1,400 $35,000 May 1,800 $ 45,000 June July 2,500 $62,500 3,500 $87,500 August September October November 3,000 $75,000 2,700 $67,500 2,000 $50,000 1,800 $45,000 2,500 $62,500 December Total Annual Sales 25,000 $625,000 Work through the worksheets in this Excel workbook to complete the required calculations and analyses. Provide explanations as instructed. January, the first month of the new fiscal year, has just ended and management is eager to see how the actual results compared to the budget. Sweetwater's fixed budget (based on projected sales of 1,200 units) for January is listed below. The actual sales volume for January was 1,500 units, which is 300 units more than originally predicted in the fixed budget. To better evaluate Sweetwater's January performance, you must prepare a flexible budget report showing actual and budgeted dollar amounts at 1,500 units. For each requirement, please add your name in the SOLUTION row for requirements that you prepared the solution. Add your name in the REVIEW row for requirements that you reviewed. If you do not agree with the solution, leave comments for your teammate explaining how you would fix it. Do not add your name in the REVIEW cell until you agree with the solution. January Fixed January Actual units sold Sales Cost of goods sold: Budget 1,200 Results 1,500 $30,000.00 $ 37,500.00 Direct materials 6,750.00 9,235.05 Direct labor 3,000.00 3,600.00 Indirect materials (all variable 4,476.00 6,283.00 Factory rent 3,000.00 3,000.00 Factory depreciation 2,520.00 2,520.00 Gross profit 10,254.00 12,861.95 Selling & Admin expenses: Shipping (2% of sales) 600.00 735.00 Sales commissions (10% of sal 3,000.00 3,750.00 Office salaries 3,000.00 3,000.00 Office rent 1,200.00 1,200.00 Office depreciation 400.00 400.00 Income from operations 2,054.00 3,776.95 Required: (A.) Prepare a Flexible Budget Performance Report for January at 1,500 units. Use a Contribution Margin format. Label the variance for each line item as favorable or unfavorable. (B.) Based on the Flexible Budget Performance Report, management would like to better understand the reasons for the direct materials variance. Sweetwater's direct materials are made up of only one raw material, which is chocolate. Calculate the direct materials price variance, direct materials quantity variance, and total direct materials variance using the following information: Direct Materials Standard Cost Per Unit = $ 5.625 18 ounces of chocolate @ $0.3125 per ounce Direct Materials Actual Costs for January = $ 9,235.05 27,985 ounces @ $0.33 per ounce SOLUTION: REVIEW: Comments: (A) (B.)