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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 Light Chocolate 7 lbs. 12 lbs. 0.5 hr. Cocoa Sugar Standard labor time Planned production Standard labor rate. Actual production (cases) Dark Chocolate Light Chocolate 13,900 cases $13.50 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 Cocoa Sugar 10 lbs. 8 lbs. 0.4 hr. Dark Chocolate 5,600 cases $13.50 per hr. 5,300 Actual Price per Pound. $5.50 0.55 Actual Labor Rate Standard Price per Pound $5.40 0.60 $13.10 per hr. 13.90 per hr. 14,500 Actual Pounds Purchased and Used 155,300 211,000 Actual Labor Hours Used 1,930 7,430 Dark chocolate Light chocolate 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. a. Direct materials price variance

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 Light Chocolate 7 lbs. 12 lbs. 0.5 hr. Cocoa Sugar Standard labor time Planned production Standard labor rate. Actual production (cases) Dark Chocolate Light Chocolate 13,900 cases $13.50 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 Cocoa Sugar 10 lbs. 8 lbs. 0.4 hr. Dark Chocolate 5,600 cases $13.50 per hr. 5,300 Actual Price per Pound. $5.50 0.55 Actual Labor Rate Standard Price per Pound $5.40 0.60 $13.10 per hr. 13.90 per hr. 14,500 Actual Pounds Purchased and Used 155,300 211,000 Actual Labor Hours Used 1,930 7,430 Dark chocolate Light chocolate 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. a. Direct materials price variance

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 positive number. a. Direct materials price variance Direct materials quantity variance Total direct materials cost variance b. $ $ 000 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 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 separated from efficiency and price variances. volume is different from the planned volume, as it production. In this way, spending from volume changes can be
Transcribed Image Text: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. a. Direct materials price variance Direct materials quantity variance Total direct materials cost variance b. $ $ 000 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 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 separated from efficiency and price variances. volume is different from the planned volume, as it production. In this way, spending from volume changes can be
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 Light Chocolate 7 lbs. 12 lbs. 0.5 hr. Cocoa Sugar Standard labor time Actual production (cases) Cocoa Sugar Dark Chocolate Dark chocolate Light chocolate Required: 10 lbs. Dark Chocolate Light Chocolate Planned production 5,600 cases $13.50 per hr. 13,900 cases $13.50 per hr. Standard labor rate 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 8 lbs. 0.4 hr. 5,300 Actual Price per Pound $5.50 0.55 Standard Price per Pound $5.40 0.60 Actual Labor Rate $13.10 per hr. 13.90 per hr. 14,500 Actual Pounds Purchased and Used 155,300 211,000 Actual Labor Hours Used 1,930 7,430 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. a. Direct materials price variance
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 Light Chocolate 7 lbs. 12 lbs. 0.5 hr. Cocoa Sugar Standard labor time Actual production (cases) Cocoa Sugar Dark Chocolate Dark chocolate Light chocolate Required: 10 lbs. Dark Chocolate Light Chocolate Planned production 5,600 cases $13.50 per hr. 13,900 cases $13.50 per hr. Standard labor rate 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 8 lbs. 0.4 hr. 5,300 Actual Price per Pound $5.50 0.55 Standard Price per Pound $5.40 0.60 Actual Labor Rate $13.10 per hr. 13.90 per hr. 14,500 Actual Pounds Purchased and Used 155,300 211,000 Actual Labor Hours Used 1,930 7,430 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. a. Direct materials price variance
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