oBook Flexible Budgeting and Variance Analysis I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The fe made available: Standard Amount per Case Dark Chocolate Light Chocolate Standard Price per Pound Cocoa 8 lbs $7.25 Sugar 10 lbs. 14 lbs. 1.40 Standard labor time 0.50 h 0.60 hr. 12 lbs. Dark Chocolate Light Chocolate Planned production 4,700 cases 11,000 cases Standard labor rate $15.50 per hr. $15.50 per hr I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the Chocolate Company had the following actual results: Dark Chocolate Light Chocolate Actual production (cases) 5,000 10,000 Actual Price per Pound Actual Pounds Purchased and Used Cocoa $7.33 140,300 Sugar 1.35 188,000 Actual Labor Rate Actual Labor Hours Used Dark chocolate $15.25 per hr 2,360 Light chocolate 15.80 per hr 6,120 Required: 1. Prepare the following variance analyses for both chocolates and the total, based on the actual results and production 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, and total variance Check My Work All work saved Save a suyan TOTO Actual Labor Rate Actual Labor Hours Used Dark chocolate $15.25 per hr 15.80 per hr 2,360 6,120 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. 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, and total variance. b. Direct labor rate variance, direct labor time variance, and total variance a. Unfavorable Direct materials price variance Direct materials quantity variance Total direct materials cost variance Favorable Unfavorable LIL II 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 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, Feedback Cuck My Work Unfavorable variances can be thought of as increasing costs (a dobit). Favorable variances can be thought of as decreasing costs (a credit Review how actual production is analyzed by using standard amounts Previous Next Check My Work