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:

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: 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.

a.	Direct materials price variance	$
	Direct materials quantity variance	$
	Total direct materials cost variance	$
b.	Direct labor rate variance	$
	Direct labor time variance	$
	Total direct labor cost variance	$

Answer rating: 100% (QA)

Material Price variance Standard Rate Actual Rate Actual Quantity Cocoa Material price variance 725 733 140300 Material price variance 11224 Sugar Mat... View the full answer