lexible 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 lbs. 8 lbs. $4.80 Sugar 9 lbs. 13 lbs. 0.60 Standard labor time 0.4 hr. 0.5 hr. Dark Chocolate Light Chocolate Planned production 5,200 cases 10,200 cases Standard labor rate $16.50 per hr. $16.50 per hr. I Love My Chocolate Company 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) 4,900 10,600 Actual Price per Pound Actual Pounds Purchased and Used Cocoa $4.90 139,400 Sugar 0.55 177,400 Actual Labor Rate Actual Labor Hours Used Dark chocolate $16.20 per hr. 1,780 Light chocolate 16.80 per hr. 5,430 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 $ 13,940 Unfavorable Direct materials quantity variance $ -8,870 Unfavorable Total direct materials cost variance $ Unfavorable b. Direct labor rate variance $ Unfavorable Direct labor time variance $ Favorable Total direct labor cost variance $ Unfavorable 2. The variance analyses should be based on the standard amounts at actual volumes. The budget must flex with the volume changes. If the actual 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 actual production. In this way, spending from volume changes can be separated from efficiency and price variances.

FILLIC bye di Valle de 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 Crana 11 lbs. 8 lbs. Standard Price per Pound 54.80 0.50 9 lbs. 13 lbs. Sugar Standard labor time 0.4 hr. 0.5 hr. Dark Chocolate Light Chocolate 5,200 cases Planned production Standard labor rate 10,200 cases $16.50 per hr. $15.50 per hr. I Love My Chocolate Company does not expect there to be any beginning or ending inventaries of cocoa or sugar. At the end of the budget year, I Love My Chacolate Company had the following actual results: Dark Chocolate Actual production (cases) 4,900 Actual Price per Pound $4.90 D.SS Light Chocolate 10,600 Actual Pounds Purchased and Used 139,400 177,400 Cocoa Sugar Actual Labor Rate Actual Labor Hours Used Dark chocolate $16.20 per hr. 16.20 per hr. 1,780 5,430 Light chocolate 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 Unfavorable $ $ 13,940 x -8,870 x Direct materials quantity variance Unfavorable Total direct materials cost variance A Ut Unfavorable b. Direct labor rate variance Unfavorable Direct labor time variance Favorable Total direct labor cost variance Unfavorable