Question
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
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 lbs. | 6 lbs. | $5.20 | |||
Sugar | 7 lbs. | 11 lbs. | 0.60 | |||
Standard labor time | 0.4 hr. | 0.5 hr. |
Dark Chocolate | Light Chocolate | |||
Planned production | 5,400 cases | 12,300 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) | 5,100 | 12,800 | ||
Actual Price per Pound | Actual Pounds Purchased and Used | |||
Cocoa | $5.30 | 123,300 | ||
Sugar | 0.55 | 172,100 | ||
Actual Labor Rate | Actual Labor Hours Used | |||
Dark chocolate | $16.10 per hr. | 1,860 | ||
Light chocolate | 16.90 per hr. | 6,560 |
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. If there is no variance, enter a zero.
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 | $ |
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