Problem 22-2 (Algorithmic) Flexible Budgeting and Variance Analysis Belgian Choc

Question

Problem 22-2 (Algorithmic)
Flexible Budgeting and Variance Analysis

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

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

Required:

1. Prepare the following variance analyses for both chocolates and 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. If there is no variance, enter a zero.

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?

The input in the box below will not be graded, but may be reviewed and considered by your instructor.

Problem 22-2 (Algorithmic)
Flexible Budgeting and Variance Analysis

Belgian 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. 9 lbs. $4.20 Sugar 10 lbs. 14 lbs. 0.60 Standard labor time 0.50 hr. 0.60 hr.
Dark Chocolate Light Chocolate Planned production 5,800 cases 13,800 cases Standard labor rate $16.00 per hr. $16.00 per hr.

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

Dark Chocolate Light Chocolate Actual production (cases) 5,500 14,400      Actual Price per Pound      Actual Pounds Purchased and Used Cocoa $4.30 196,600 Sugar 0.55 250,200 Actual Labor Rate      Actual Labor Hours Used Dark chocolate $15.50 per hr. 2,500 Light chocolate 16.50 per hr. 8,860

Required:

1. Prepare the following variance analyses for both chocolates and total, based on the actual results and production levels at the end of the budget year:

1. Direct materials price variance, direct materials quantity variance, and total variance.
2. 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. If there is no variance, enter a zero.

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: $

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?

The input in the box below will not be graded, but may be reviewed and considered by your instructor.

Explanation / Answer

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.