Flexible Budgeting and Variance Analysis Required: 1. Prepare the following vari

Question

Flexible Budgeting and Variance Analysis

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:

Use the minus sign to enter favorable variances as negative numbers.

a.Direct materials price variance $_________ Favorable/ Unfavorable

Direct materials quantity variance $________ Favorable/Unfavorable

Total Direct materials cost variance $_______ Favorable/Unfavorable

b. Direct labor rate variance $______ Favorable/Infavorable

Direct labor time variance $______ Favorable/Unfavorable

Total direct lobaor cost variance $_______ Favorable/ Unfavorable

Explanation / Answer

a Total Direct materials price variance = $3750 Unfavorable

.Direct materials price variance of Cocoa $11750 Unfavorable

.Direct materials price variance of Sugar $8000 Favorable

Total Direct materials quantity variance = $350 Favorable

Direct materials quantity variance of Cocoa $2250 Unfavorable

Direct materials quantity variance of Sugar $2600 Favorable

Total Direct materials cost variance = $3400 Unfavorable

Total Direct materials cost variance of Cocoa $14000 Unfavorable

Total Direct materials cost variance of Sugar $10600 Favorable

b. Direct labor rate variance $1038 Unfavorable

For dark chocolate = $762 Favorable

For light chocolate =$1800 Unfavorable

Direct labor time variance $435 Favorable

For dark chocolate = $1885 Favorable

For light chocolate =$1450 Unfavorable

Total direct lobaor cost variance $603 Unfavorable

For dark chocolate = $2647 Favorable

For light chocolate =$3250 Unfavorable

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