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Obj. 1, 2, 3 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:

Obj. 1, 2, 3 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:

FINANCIAL ACCOUNTING
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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a. 1 B 4 5 6 7 8 9 0 -1 2 3 54 55 56 67 58 59 70 Direct Materials Variance Price variance: Actual price Standard price Variance Actual quantity (lbs.) Direct materials price variance (favorable) unfavorable Quantity variance: Actual quantity used (lbs.) Standard quantity used (lbs.) Variance (lbs.) Standard price Direct materials quantity variance (favorable) unfavorable Total direct materials cost variance (favorable) unfavorable Total direct materials cost variance: Actual cost Standard cost Total direct materials cost variance (favorable) unfavorable Supporting calculations: Standard quantity used of cocoa: Cases produced Standard amount per case (lbs.) Total Standard quantity used of sugar: Cases produced Standard amount per case (lbs.) Total Direct Labor Variance Rate variance: Actual rate Standard rate Variance Actual time Direct labor rate variance (favorable) unfavorable Time variance Actual tiime Standard time Variance Standard rate Direct labor time variance (favorable) unfavorable Total direct labor cost variance (favorable) unfavorable Total direct labor cost variance: Actual cost Standard cost Total direct labor cost variance (favorable) unfavorable $ $ $ $ $ $ $ Cocoa Dark Chocolate $ 7.33 (7.25) 0.08 140,300 11,224 Dark Chocolate $ 140,300 (140,000) 300 $7.25 2,175 15.25 (15.50) (0.25) 2,360 (590) 2,360 (2,500) (140) $15.50 (2,170) 2,360 (140) $ $ $ 188,000 (190,000) (2,000) $1.40 $ (2,800) Light Chocolate $ $ Sugar Light Chocolate $ 1.35 (1.40) (0.05) 188,000 (9,400) $ 15.80 (15.50) 0.30 6,120 1,836 6,120 (6,000) 120 $15.50 1,860 $ $ $ $ $ Total (625) $ 1,199 1,824 1,199 Total Total 1,246 (310) 936 936
Transcribed Image Text:a. 1 B 4 5 6 7 8 9 0 -1 2 3 54 55 56 67 58 59 70 Direct Materials Variance Price variance: Actual price Standard price Variance Actual quantity (lbs.) Direct materials price variance (favorable) unfavorable Quantity variance: Actual quantity used (lbs.) Standard quantity used (lbs.) Variance (lbs.) Standard price Direct materials quantity variance (favorable) unfavorable Total direct materials cost variance (favorable) unfavorable Total direct materials cost variance: Actual cost Standard cost Total direct materials cost variance (favorable) unfavorable Supporting calculations: Standard quantity used of cocoa: Cases produced Standard amount per case (lbs.) Total Standard quantity used of sugar: Cases produced Standard amount per case (lbs.) Total Direct Labor Variance Rate variance: Actual rate Standard rate Variance Actual time Direct labor rate variance (favorable) unfavorable Time variance Actual tiime Standard time Variance Standard rate Direct labor time variance (favorable) unfavorable Total direct labor cost variance (favorable) unfavorable Total direct labor cost variance: Actual cost Standard cost Total direct labor cost variance (favorable) unfavorable $ $ $ $ $ $ $ Cocoa Dark Chocolate $ 7.33 (7.25) 0.08 140,300 11,224 Dark Chocolate $ 140,300 (140,000) 300 $7.25 2,175 15.25 (15.50) (0.25) 2,360 (590) 2,360 (2,500) (140) $15.50 (2,170) 2,360 (140) $ $ $ 188,000 (190,000) (2,000) $1.40 $ (2,800) Light Chocolate $ $ Sugar Light Chocolate $ 1.35 (1.40) (0.05) 188,000 (9,400) $ 15.80 (15.50) 0.30 6,120 1,836 6,120 (6,000) 120 $15.50 1,860 $ $ $ $ $ Total (625) $ 1,199 1,824 1,199 Total Total 1,246 (310) 936 936
PR 23-2A Flexible Budgeting and Variance Analysis Obj. 1, 2, 3 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: Cocoa Sugar Standard labor time Planned production Standard labor rate Cocoa Sugar Standard Amount per Case Dark Chocolate Light Chocolate Actual production (cases) Dark chocolate Light chocolate Instructions 12 lbs. 10 lbs. 0.50 hr. Dark Chocolate 4,700 cases $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 5,000 Actual Price per Pound $7.33 1.35 Actual Labor Rate $15.25 per hr. 15.80 per hr. 8 lbs. 14 lbs. 0.60 hr. Standard Price per Pound $7.25 1.40 Answer Check Figure: Direct materials quantity variance, $(625) F Light Chocolate 11,000 cases $15.50 per hr. Light Chocolate 10,000 Actual Pounds Purchased and Used 140,300 188,000 Actual Labor Hours Used 2,360 6,120 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. Why are the standard amounts in part (1) based on the actual production for the year instead of the planned production for the year?
Transcribed Image Text:PR 23-2A Flexible Budgeting and Variance Analysis Obj. 1, 2, 3 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: Cocoa Sugar Standard labor time Planned production Standard labor rate Cocoa Sugar Standard Amount per Case Dark Chocolate Light Chocolate Actual production (cases) Dark chocolate Light chocolate Instructions 12 lbs. 10 lbs. 0.50 hr. Dark Chocolate 4,700 cases $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 5,000 Actual Price per Pound $7.33 1.35 Actual Labor Rate $15.25 per hr. 15.80 per hr. 8 lbs. 14 lbs. 0.60 hr. Standard Price per Pound $7.25 1.40 Answer Check Figure: Direct materials quantity variance, $(625) F Light Chocolate 11,000 cases $15.50 per hr. Light Chocolate 10,000 Actual Pounds Purchased and Used 140,300 188,000 Actual Labor Hours Used 2,360 6,120 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. Why are the standard amounts in part (1) based on the actual production for the year instead of the planned production for the year?
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