er7 Performance Evaluation Using Variances H OBJ. 1,2,3 PR 7-2A Flexible budgeting and variance analysis I Love My Chocolate Company makes dark chocolate and light chocolate. Both require cocoa and sugar. The following planning information has been made avalucts ity Standard Price per Pound $7.25 Standard Amount per Case Light Chocolate Dark Chocolate 12 lbs. 10 lbs. 0.50 hr 8 lbs. 14 lbs 0.60 hr. 1.40 Cocoa Sugar Standard labor time Dark Chocolate 4,700 cases $15.50 per hr Light Chocolate 11,000 cases $15.50 per hr. Planned production Standard labor rate I Love My Chocolate Company does not expect there to be any beginning or endin pany had the following actual results: inventories of cocoa or sugar. At the end of the budget year, I Love My Chocolate Com Dark Chocolate 5,000 Actual Price per Pound $7.33 1.35 Actual Labor Rate $15.25 per hr 15.80 per hr Light Chocolate 10,000 Actual Pounds Purchased and Used 140,300 188,000 Actual Labor Hours Used 2,360 6 120 Actual production (cases) Cocoa Sugar Dark chocolate Light chocolate Instructions 1. Prepare the following variance analyses for both chocolate the total, based on year: the actual results and production levels at the end of the b 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 the year