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table [ [ Sugar , 0 . 5 5 , 1 8 8 , 8 0 0 ] , [ Actual Labor Rate,Actual Labor
tableSugarActual Labor Rate,Actual Labor Hours UsedDark chocolate,$ per Light chocolate, per hr
Required:
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
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.
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