**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 | 9 lbs. | 6 lbs. | $4.40 || Sugar | 7 lbs. | 11 lbs. | 0.60 || Standard labor time | 0.3 hr. | 0.4 hr. | |**Dark Chocolate Light Chocolate**| | Dark Chocolate | Light Chocolate ||------------------------|----------------|-----------------|| Planned production | 4,300 cases | 11,200 cases || Standard labor rate | $15.00 per hr. | $15.00 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 Company had the following actual results:***Dark Chocolate**| | Actual Production (cases) ||------------------------|---------------------------|| | 4,100 |**Light Chocolate**| | Actual Production (cases) ||------------------------|---------------------------|| | 11,600 |**Actual Price per Pound**| | Cocoa | Sugar ||--------|-------|-------|| | $4.50 | 0.55 || | Actual Pounds Purchased and Used ||------------------------|----------------------------------|| Cocoa | 107,000 || Sugar | 152,400 |**Actual Labor Rate and Hours Used**| | Actual Labor Rate | Actual Labor Hours Used ||------------------------|-------------------|-------------------------|| Dark chocolate | $14.60 per hr. | || | | 1,120 |This detailed breakdown helps in analyzing variances and understanding the efficiency of production processes in the company. ### Variance Analysis for Chocolate Production#### Given Data:- **Actual Labor Rate:** - Dark chocolate: $14.60 per hour - Light chocolate: $15.40 per hour- **Actual Labor Hours Used:** - Dark chocolate: 1,120 hours - Light chocolate: 4,760 hours#### Task:1. **Prepare Variance Analyses** for both types of chocolates as well as the total: - **Direct Materials Variance:** - Price Variance - Quantity Variance - Total Variance - **Direct Labor Variance:** - Rate Variance - Time Variance - Total Variance2. **Enter Variances:** - Favorable variances are entered as negative numbers (using a minus sign). - Unfavorable variances are entered as positive numbers.##### a. Direct Materials Cost Variance:- **Direct Materials Price Variance:** $5,350 (Unfavorable)- **Direct Materials Quantity Variance:** [Input Required]- **Total Direct Materials Cost Variance:** [Input Required]##### b. Direct Labor Cost Variance:- **Direct Labor Rate Variance:** [Input Required]- **Direct Labor Time Variance:** [Input Required]- **Total Direct Labor Cost Variance:** [Input Required]#### Notes:2. **Variance Analysis Conditions:** - Analysis should be based on the actual amounts at actual production volumes. - The budget should adjust for volume changes to accurately reflect performance.Enter the data accordingly to calculate any variances that reflect changes in efficiency, pricing, or production volume.

Name: **Flexible Budgeting and Variance Analysis**I Love My Chocolate Compa
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: **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**|

As per the we guidelines we can provide the answer for part 1. If need answer for remaining part…

Business

Accounting

Actual Labor Rate Actual Labor Hours Used Dark chocolate $14.60 per hr. 1,120 Light chocolate 15.40 per hr. 4,760 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. Direct materials price variance -5,350 x Unfavorable a. Direct materials quantity variance Total direct materials cost variance b. Direct labor rate variance Direct labor time variance Total direct labor cost variance 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.

Actual Labor Rate Actual Labor Hours Used Dark chocolate $14.60 per hr. 1,120 Light chocolate 15.40 per hr. 4,760 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. Direct materials price variance -5,350 x Unfavorable a. Direct materials quantity variance Total direct materials cost variance b. Direct labor rate variance Direct labor time variance Total direct labor cost variance 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Direct Labor Variances The following data relate to labor cost for production of 4,100 cellular telephones: Actual: 2,750 hrs. at $13.00 Standard: 2,710 hrs. at $13.30 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Rate variance $ Time variance $ Total direct labor cost variance b. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in a labor rate than planned. The lower level of experience or training may have resulted in efficient performance. Thus, the actual time required was than standard.
Direct labor variances Bellingham Company produces a product that requires 3 standard direct labor hours per unit at a standard hourly rate of $22.00 per hour. 15,200 units used 65,200 hours at an hourly rate of $19.50 per hour. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. X Open spreadsheet What is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Round your answers to the nearest dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Direct labor rate variance b. Direct labor time variance c. Direct labor cost variance
Computation of Variable Cost Variances The following information pertains to the standard costs and actual activity for Repine Company for September: Standard cost per unit Direct materials Direct labor Activity for September Materials purchased Material A Material B Materials used Material A Material B Direct labor used Production output 3 units of material A x $8.00 per unit 2 units of material B x $4.00 per unit 2 hours x $15.00 per hour 7,000 units x $7.80 per unit 4,800 units x $4.50 per unit Materials price variance $ Materials quantity variance 6,430 units 3,950 units 4,100 hours x $15.50 per hour 2,000 units There were no beginning direct materials inventories. (a) Determine the materials price and quantity variances. Material A (b) Determine the labor rate and efficiency variances. Labor rate variance $ Labor efficiency variance $ ◆ → $ → Material B ◆ →
Direct Labor Variances The following data relate to labor cost for production of 33,000 cellular telephones: Actual: Standard: 6,330 hrs. at $49.50 6,240 hrs. at $51.00 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. $ SA A Favorable Unfavorable ✓ Favorable b. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in a lower labor rate than planned. The lower level of experience or training may have resulted in less ✔ efficient performance. Thus, the actual time required was more ✔ than standard. Rate variance Time variance Total direct labor cost variance
The following data relate to labor cost for production of 3,300 cellular telephones: Actual: 2,210 hrs. at $14.20Standard: 2,180 hrs. at $14.40 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Line Item Description Amount Variance Rate variance $fill in the blank 1 Time variance $fill in the blank 3 Total direct labor cost variance $fill in the blank 5
Direct Materials Variances The following data relate to the direct materials cost for the production of automobile tires: Actual: 53,700 lbs. at $1.75 per lb.Standard: 52,100 lbs. at $1.80 per lb. a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Line Item Description Amount Variance Direct Materials Price Variance $fill in the blank 1 Direct Materials Quantity Variance $fill in the blank 3 Total Direct Materials Cost Variance $fill in the blank 5
Direct Labor Variances The following data relate to labor cost for production of 3,800 cellular telephones: Actual: 2,600 hrs. at $14.20 Standard: 2,560 hrs. at $14.50 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Rate variance $fill in the blank 1 Time variance $fill in the blank 3 Total direct labor cost variance $fill in the blank 5 b. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in a labor rate than planned. The lower level of experience or training may have resulted in efficient performance. Thus, the actual time required was than standard.
Performance Eval Variances: Refer to the picture. Thanks!
Direct Labor Variances The following data relate to labor cost for production of 5,800 cellular telephones: Actual: 3,940 hrs. at $12.60 Standard: 3,880 hrs. at $12.80 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Rate variance $fill in the blank 1 Time variance $fill in the blank 3 Total direct labor cost variance $fill in the blank 5
Direct Labor Variances The following data relate to labor cost for production of 4,300 cellular telephones: 2,930 hrs. at $15.50 2,880 hrs. at $15.80 Actual: Standard: a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Rate variance Time variance Total direct labor cost variance Feedback Favorable Unfavorable b. The employees may have been less-experienced or poorly trained, thereby resulting in a lower level of experience or training may have resulted in less than standard. Consider factors affecting labor performance. Favorable labor rate than planned. The lower efficient performance. Thus, the actual time required was more Check My Work Unfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit). The labor cost variance is the…