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

Koko Chocolate does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, Koko 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?

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Standard Quantity Standard Price per Pound $8.80 1.40 Dark Chocolate Light Chocolate Cocoa Sugar Standard labor time Planned production Standard labor rate 14 lbs 12 lbs 0.30 hr. 3,200 cases $16.40 per hour16.20 per hour 9 lbs 15 lbs 0.45 hr 4,600 cases Dark Chocolate Light Chocolate Actual production (cases) 2,500 4,500 Actual Price per Pound $8.50 1.65 Actual Pounds Purchased and Used 74,250 108,600 Actual Labor Hours Used 760 2,000 Cocoa Sugar Actual Labor Rate Dark chocolate Light chocolate $16.50 16.50