Question

Materlals Variances Manzana Company produces apple juice sold in gallons. Recently, the company adopted the following material standard for one gallon of its apple juice Direct materials 128 oz.@ s0.05- $6.40 During the first week of operation, the company experienced the following results: a. Gallon units produced: 24,000 b. Ounces of materials purchased and used: 2,800,000 ounces at $0.060. C. No beginning or ending inventories of raw materials Required: If required, enter favorable values as negative numbers. 1. Compute the materials price variance. 28,000 Unfavorable 2. Compute the materials usage variance Favorable 3. During the second week, the materials usage variance was $4,000 nfaorable and the materials price variance was $24,000 unfavorable. The company purchased and used 2,270,000 ounces of material during this week. How many gallons of juice were produced? If required, round your answer to nearest whole value. gallons What was the actual price paid per ounce of materials? Round your answer to the nearest cent. per ounce

Answer 1

		Standard Cost:
		Qty	Rate	PU
		128.00	0.05	6.40
		Standard Cost for Actual Production:
		Qty	Rate	PU
		3,072,000	0.05	153,600
		Actual Cost for Actual Production:
		Qty	Rate	PU
		2,800,000	0.06	168,000
	1	Material Price Variance:
		(Standard Price-Actual Price)* Actual Qty
		(0.05-0.06)*2800000
		-28000	Unfavourbale
	2	Material Usage Variance:
		(Standard Qty-Actual QTY)* Standard Price
		(3072000-2800000)*0.05
		13600	Favourable
	3	Material Usgae Variance	-4000
		Material Price Variance	-24000
		Material Usage Variance:
		(Standard Qty-Actual Qty)* Standard Price	-4000
		(Standard Qty-2270000)* 0.05	-4000
		(0.05Standard Qty-113500)	-80000
		Standard Qty=3870000
		Standard Qty fro Actual Production	3870000
		Standard Qty PU	128.00
		Units Produced	30234
	4	Material Price Variance:
		(Standard Price-Actual Price)* Actual Qty	-24000
		(0.05-Actual Price)*(2270000)	-24000
		113500-2270000 Actual Price	-24000
		2270000*Actual Price	137500
		Actual Price	0.06