Required:1. Prepare the following variance analyses for both chocolates and the total, based on the actual results andproduction 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 positivenumber.а.Direct materials price varianceDirect materials quantity varianceTotal direct materials cost varianceb.Direct labor rate varianceDirect labor time varianceTotal direct labor cost variance2. The variance analyses should be based on theamounts atvolumes.The budget must flex with the volume changes. If thevolume is different from the plannedvolume, as it was in this case, then the budget used for performance evaluation should reflect the change in directmaterials and direct labor that will be required for theproduction. In this way, spending fromvolume changes can be separated from efficiency and price variances. I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. Thefollowing planning information has been made available:Standard Amount per CaseDark ChocolateLight ChocolateStandard Price per Pound7 Ibs.Сосоа10 Ibs.$5.00Sugar8 Ibs.12 Ibs.0.60Standard labor time0.3 hr.0.4 hr.Dark ChocolateLight ChocolatePlanned production5,400 cases14,000 casesStandard 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. Atthe end of the budget year, I Love My Chocolate Company had the following actual results:Dark ChocolateLight ChocolateActual production (cases)5,10014,600Actual Price per PoundActual Pounds Purchased and UsedСосоа$5.10154,000Sugar0.55210,600Actual Labor RateActual Labor Hours UsedDark chocolate$14.00 per hr.1,390Light chocolate15.00 per hr.5,990Required:

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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 posi number. a. Direct materials price variance Direct materials quantity variance Total direct materials cost variance b. Direct labor rate variance Direct labor time variance

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 posi number. a. Direct materials price variance Direct materials quantity variance Total direct materials cost variance b. Direct labor rate variance Direct labor time variance

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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