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: a. Direct materials price variance, direct materials quantity variance, and total variance. b. 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. а. Direct materials price variance $ Direct materials quantity variance Total direct materials cost variance 2$ b. Direct labor rate variance $ Direct labor time variance $ Total direct labor cost variance 2. The variance analyses should be based on the amounts at volumes. The budget must flex with the volume changes. If the volume is different from the planned volume, as it was in this case, then the budget used for performance evaluation should reflect the change in direct materials and direct labor that will be required for the production. In this way, spending from volume changes can be separated from efficiency and price variances.
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: a. Direct materials price variance, direct materials quantity variance, and total variance. b. 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. а. Direct materials price variance $ Direct materials quantity variance Total direct materials cost variance 2$ b. Direct labor rate variance $ Direct labor time variance $ Total direct labor cost variance 2. The variance analyses should be based on the amounts at volumes. The budget must flex with the volume changes. If the volume is different from the planned volume, as it was in this case, then the budget used for performance evaluation should reflect the change in direct materials and direct labor that will be required for the production. In this way, spending from volume changes can be separated from efficiency and price variances.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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:
a. Direct materials price variance, direct materials quantity variance, and total variance.
b. 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.
а.
Direct materials price variance
$
Direct materials quantity variance
Total direct materials cost variance
2$
b.
Direct labor rate variance
$
Direct labor time variance
$
Total direct labor cost variance
2. The variance analyses should be based on the
amounts at
volumes. The budget must flex with the volume changes. If the
volume is different from the planned volume, as it was in this case, then the budget used for performance evaluation should reflect the change in
direct materials and direct labor that will be required for the
production. In this way, spending from volume changes can be separated from efficiency
and price variances.
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