Question

Standard Product Cost, Direct Materials Variance

Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,400 pounds) has the following standards:

	Standard Quantity		Standard Price
Whole tomatoes	2,300	lbs.	$ 0.51	per lb.
Vinegar	130	gal.	$ 3.10	per gal.
Corn syrup	11	gal.	$ 11.30	per gal.
Salt	52	lbs.	$ 2.80	per lb.

The actual materials in a batch may vary from the standard due to tomato characteristics. Assume that the actual quantities of materials for batch K-111 were as follows:

2,400 lbs. of tomatoes

125 gal. of vinegar

12 gal. of corn syrup

51 lbs. of salt

a. Determine the standard unit materials cost per pound for a standard batch. If required, round amounts to the nearest cent.

Ingredient	Standard Cost per Batch
Whole tomatoes	$
Vinegar	$
Corn syrup	$
Salt	$
Total	$
Standard unit materials cost per pound	$

b.  Determine the direct materials quantity variance for batch K-111. If required, round amounts to the nearest cent. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Ingredient	Materials Quantity Variance	Favorable/Unfavorable
Whole tomatoes	$
Vinegar	$
Corn syrup	$
Salt	$
Total direct materials quantity variance	$

Answer 1

a. Determine the standard unit materials cost per pound for a standard batch. If required, round amounts to the nearest cent.

Ingredient	Standard Cost per Batch
Whole tomatoes	$1173
Vinegar	$403
Corn syrup	$124.30
Salt	$145.60
Total	$1845.90
Standard unit materials cost per pound	$1.32

b.  Determine the direct materials quantity variance for batch K-111. If required, round amounts to the nearest cent. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Ingredient	Materials Quantity Variance	Favorable/Unfavorable
Whole tomatoes	$51	Unfavorable
Vinegar	$15.50	Favorable
Corn syrup	$11.30	Unfavorable
Salt	$2.8	Favorable
Total direct materials quantity variance	$44	Unfavorable