Cocoa Delights Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available:

Cocoa Delights Chocolate does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, Cocoa Delights Chocolate had the following actual results:

Instructions
1. Prepare the following variance analyses, 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.
2. Why are the standard amounts in part (1) based on the actual production for the year instead of the planned production for theyear?

Transcribed Image Text:

Standard Quantity Dark Chocolate Light Chocolate Standard Price per Pound 8 Ibs. 13 Ibs. 0.50 hr. 5,000 cases $14.00 per hr. 12 lbs. $4.50 0.65 Cocoa Sugar Standard labor time Planned production Standard labor rate 9 Ibs. 0.35 hr. 3,000 cases $14.40 per hr.