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 12 lbs. 8 lbs. $7.25 Sugar 10 lbs. 14 lbs. 1.40 Standard labor time 0.50 hr. 0.60 hr. Dark Chocolate Light Chocolate Planned production 4,700 cases 11,000 cases Standard labor rate $15.50 per hr. $15.50 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 Light Chocolate Actual production (cases) 5,000 10,000 Actual Price per Pound Actual Pounds Purchased and Used Cocoa $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 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. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct materials price variance, direct materials quantity variance, and total variance. Direct labor rate variance, direct labor time variance, and total variance. Direct materials price variance $ Direct materials quantity variance $ Total direct materials cost variance $ Direct labor rate variance $ Direct labor time variance $ Total direct labor cost variance $
Flexible
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 |
12 lbs. |
|
8 lbs. |
|
$7.25 |
|
Sugar |
10 lbs. |
|
14 lbs. |
|
1.40 |
|
Standard labor time |
0.50 hr. |
|
0.60 hr. |
|
|
|
|
Dark Chocolate |
Light Chocolate |
||
Planned production |
4,700 cases |
|
11,000 cases |
|
Standard labor rate |
$15.50 per hr. |
|
$15.50 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 |
Light Chocolate |
||
Actual production (cases) |
5,000 |
10,000 |
||
|
Actual Price per Pound |
Actual Pounds Purchased and Used |
||
Cocoa |
$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 |
|
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. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
- Direct materials price variance, direct materials quantity variance, and total variance.
- Direct labor rate variance, direct labor time variance, and total variance.
Direct materials price variance |
$ |
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Direct materials quantity variance |
$ |
|
|
|
Total direct materials cost variance |
$ |
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|
|
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|
|
|
|
Direct labor rate variance |
$ |
|
|
|
Direct labor time variance |
$ |
|
|
|
Total direct labor cost variance |
$ |
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