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.

Name: Flexible Budgeting and Variance AnalysisI Love My Chocolate Company m
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Description: Flexible Budgeting and Variance AnalysisI 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 CaseDark ChocolateLig

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 11PB: Use the following standard cost card for 1 gallon of ice cream to answer the questions. Actual...

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Flexible Budgeting and Variance Analysis Sharon's Delights Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available: Standard Amount Standard Amount Cocoa Sugar Standard labor time per Case per Case Dark Chocolate Light Chocolate Standard Price per Pound 12 lbs. 9 lbs. 10 lbs. 14 lbs. $4.40 0.60 0.3 hr. 0.4 hr. Planned production Standard labor rate Dark Chocolate 5,000 cases $15.00 per hr. Light Chocolate 10,800 cases $15.00 per hr. Sharon's Delights Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, Sharon's Delights Chocolate Company had the following actual results: Dark Chocolate Light Chocolate Actual production (cases) 4,800 11,200 Actual Price per Pound Actual Quantity Purchased and Used Cocoa Sugar $4.50 159,200 0.55 199,700 Actual Labor Rate Actual Labor Hours Used Dark chocolate $14.70 per hr.…
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 lb. 9 lb. $4.9 Sugar 10 lb. 14 lb. 0.6 Standard labor time 0.3 hr. 0.4 hr. Dark Chocolate Light Chocolate Planned production 5,100 cases 10,300 cases Standard labor rate $14.5 per hr. $14.5 per hr. I Love My Chocolate 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) 4,800 10,700 Actual Price per Pound Actual Pounds Purchased and Used Cocoa $5 154,700 Sugar 0.55 192,900 Actual Labor Rate Actual Labor Hours Used Dark chocolate…
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 11 lb. 8 lb. $4.7 Sugar 9 lb. 13 lb. 0.6 Standard labor time 0.4 hr. 0.5 hr. Dark Chocolate Light Chocolate Planned production 5,200 cases 11,700 cases Standard labor rate $15 per hr. $15 per hr. I Love My Chocolate 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) 4,900 12,200 Actual Price per Pound Actual Pounds Purchased and Used Cocoa $4.8 152,300 Sugar 0.55 197,600 Actual Labor Rate Actual Labor Hours Used Dark chocolate…
Flexible Budgeting and Variance Analysis Sharon’s Delights Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available: Line Item Description Standard Amount per CaseDark Chocolate Standard Amount per CaseLight Chocolate      Standard Price per Pound Cocoa 10 lbs. 7 lbs. $4.20 Sugar 8 lbs. 12 lbs. 0.60 Standard labor time 0.3 hr. 0.4 hr. Line Item Description Dark Chocolate Light Chocolate Planned production 4,500 cases 12,800 cases Standard labor rate $14.00 per hr. $14.00 per hr. Sharon’s Delights Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, Sharon’s Delights Chocolate Company had the following actual results: Line Item Description Dark Chocolate Light Chocolate Actual production (cases) 4,300 13,300 Line Item Description Actual Price per Pound      Actual…
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 10 lbs. 7 lbs. $4.70 Sugar 8 lbs. 12 lbs. 0.60 Standard labor time 0.3 hr. 0.4 hr. Dark Chocolate Light Chocolate Planned production 3,800 cases 10,600 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) 3,600 11,000      Actual Price per Pound      Actual Pounds Purchased and Used Cocoa $4.80 113,600 Sugar 0.55 156,800 Actual Labor…
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 11 lb. 8 lb. $4.3     Sugar 9 lb. 13 lb. 0.6     Standard labor time 0.4 hr. 0.5 hr. Dark Chocolate Light Chocolate Planned production 5,400 cases   11,000 cases   Standard labor rate $13 per hr.   $13 per hr.   I Love My Chocolate 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) 5,100 11,400 Actual Price per Pound Actual Pounds Purchased and Used Cocoa $4.4     148,000 Sugar 0.55     189,200 Actual Labor Rate Actual Labor Hours Used…
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