Answered step by step
Verified Expert Solution
Question
1 Approved Answer
need help with practice problem please show the steps Standard Amount per Case Dark Chocolate Light Chocolate 12 lbs. 9 lbs. 10 lbs. 14 lbs.
need help with practice problem please show the steps
Standard Amount per Case Dark Chocolate Light Chocolate 12 lbs. 9 lbs. 10 lbs. 14 lbs. 0.4 hr. 0.5 hr. Standard Price per Pound $5.00 Cocoa 0.60 Sugar Standard labor time Dark Chocolate Light Chocolate Planned production 4,600 cases 11,300 cases Standard labor rate $14.50 per hr. $14.50 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) 4,400 11,800 Actual Price per Pound Actual Pounds Purchased and Used 159,800 Cocoa Sugar $5.10 0.55 Actual Labor Rate $14.00 per hr. 15.00 per hr. 204,000 Actual Labor Hours Used 1,600 6,050 Dark chocolate Light chocolate 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 amounts at volumes. The budget must flex with the volume changes. If the 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 production. In this way, spending from volume changes can be separated from efficiency and price variances
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started