Standard Amount per Case Dark Light Standard Price per Chocolate Chocolate Pound Сосоа 121b. 81b. $7.25 Sugar 101b. 141b. 1.40 Standard labor 0.50 hr. 0.60 hr. time Planned production 4,700 cases 11,000 cases Standard labor $15.50 per $ 15.50 per rate hr. hr. Dark Chocolate Light Chocolate Actual production |(cases) 5,000 10,000 Actual Price per Actual Pounds Purchased Pound and Used |Сосоа $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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Flexible budgeting and variance analysis
I Love My Chocolate Company makes dark chocolate and light
chocolate. Both products require cocos and sugar. The following
planning information has been made available: (8.PNG)

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: (9.PNG)

Instructions
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, quantity, and total variance
b. Direct labor rate, time, and total variance
2. Why are the standard amounts in part (1) based on the actual
production for the year instead of the planned production for the year?

 

 

Standard Amount per Case
Dark
Light
Standard Price per
Chocolate
Chocolate
Pound
Сосоа
121b.
81b.
$7.25
Sugar
101b.
141b.
1.40
Standard labor
0.50 hr.
0.60 hr.
time
Planned
production
4,700 cases
11,000 cases
Standard labor
$15.50 per
$ 15.50 per
rate
hr.
hr.
Transcribed Image Text:Standard Amount per Case Dark Light Standard Price per Chocolate Chocolate Pound Сосоа 121b. 81b. $7.25 Sugar 101b. 141b. 1.40 Standard labor 0.50 hr. 0.60 hr. time Planned production 4,700 cases 11,000 cases Standard labor $15.50 per $ 15.50 per rate hr. hr.
Dark Chocolate
Light Chocolate
Actual production
|(cases)
5,000
10,000
Actual Price per
Actual Pounds Purchased
Pound
and Used
|Сосоа
$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
Transcribed Image Text:Dark Chocolate Light Chocolate Actual production |(cases) 5,000 10,000 Actual Price per Actual Pounds Purchased Pound and Used |Сосоа $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
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