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 10 lbs. 7 Ibs. $5.00 S Ibs. 0.4 hr. Sugar 12 lbs. 0.60 Standard labor time 0.5 he Dark Chocolate Light Chocolate Planned production 5.800 cases 11.000 cases Standard labor race $16.00 per he $16.00 per hr. I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocsa or sugar. At the end of the budget year. I Love My Chocolate Company had the folloing actual results: Dark Chocolate Light Chocolate Actual production (cases) 5.500 11.400 Actual Price per Pound Actual Pounds Purchased and Used Cocoa $5.10 135.500 Sugar 0.55 176.300 Actual Labor Rate Actual Labor Hours Used Dark chocolate $15.70 per hr. 2.000 Light chocolate 16.30 per hr. 5.840 Requiredi 1. Prepare the following variance analyses for berh chocolaces and the socal. based on the actual results and production leveis az the end of the budget year: a. Direct materials price variance, direct materials quantity variance, and socal variance. b. Direct labor rane variance, direct labor time variance, and tocal variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number S 4,735 Unfavorable a. Direct materials price variance Direct materials quantity variance 800 v Unfavorable v Total direct materials cost variance 5.535V Unfavorable v b. Direct labor rate variance Unfavorable v Direct labor time variance Favorable v Total direct labor cost variance Unfavorable
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 10 lbs. 7 Ibs. $5.00 S Ibs. 0.4 hr. Sugar 12 lbs. 0.60 Standard labor time 0.5 he Dark Chocolate Light Chocolate Planned production 5.800 cases 11.000 cases Standard labor race $16.00 per he $16.00 per hr. I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocsa or sugar. At the end of the budget year. I Love My Chocolate Company had the folloing actual results: Dark Chocolate Light Chocolate Actual production (cases) 5.500 11.400 Actual Price per Pound Actual Pounds Purchased and Used Cocoa $5.10 135.500 Sugar 0.55 176.300 Actual Labor Rate Actual Labor Hours Used Dark chocolate $15.70 per hr. 2.000 Light chocolate 16.30 per hr. 5.840 Requiredi 1. Prepare the following variance analyses for berh chocolaces and the socal. based on the actual results and production leveis az the end of the budget year: a. Direct materials price variance, direct materials quantity variance, and socal variance. b. Direct labor rane variance, direct labor time variance, and tocal variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number S 4,735 Unfavorable a. Direct materials price variance Direct materials quantity variance 800 v Unfavorable v Total direct materials cost variance 5.535V Unfavorable v b. Direct labor rate variance Unfavorable v Direct labor time variance Favorable v Total direct labor cost variance Unfavorable
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Please help with part B
Transcribed Image Text:Flexible 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
10 Ibs.
7 Ibs.
$5.00
Sugar
8 Ibs.
12 lbs.
0.60
Standard labor time
0.4 hr.
0.5 hr.
Dark Chocolate
Light Chocolate
Planned production
5,800 cases
11,000 cases
Standard labor rate
$16.00 per hr.
$16.00 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 Con
mpany had the following actual results:
Dark Chocolate
Light Chocolate
Actual production (cases)
5,500
11,400
Actual Price per Pound
Actual Pounds Purchased and Used
Сосоа
$5.10
135,500
Sugar
0.55
176,300
Actual Labor Rate
Actual Labor Hours Used
Dark chocolate
$15.70 per hr.
2,000
Light chocolate
16.30 per hr.
5,840
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.
Unfavorable v
Unfavorable v
Direct materials price variance
4,735 V
a.
Direct materials quantity variance
800
Total direct materials cost variance
5,535
Unfavorable v
b.
Direct labor rate variance
Unfavorable v
Direct labor time variance
Favorable v
Total direct labor cost variance
Unfavorable
2. The variance analyses should be based on the standard v
amounts at actual v
volumes. The budget must flex with the volume changes. If the actual v
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 v production. In this way, spending from volume changes can be separated from efficiency and price variances.
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