Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,900 pounds) has the following standards:
Standard Quantity | Standard Price | |||
Whole tomatoes | 3,200 | lbs. | $ 0.52 | per lb. |
Vinegar | 180 | gal. | $ 3.20 | per gal. |
Corn syrup | 15 | gal. | $ 11.60 | per gal. |
Salt | 72 | lbs. | $ 2.90 | 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:
3,300 lbs. of tomatoes |
173 gal. of vinegar |
16 gal. of corn syrup |
71 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 | $ |
Answers
[a]
Ingredient | Standard quanity | Standard price | Standard Cost per Batch |
Whole tomatoes | 3,200 | $ 0.52 | $ 1,664.00 |
Vinegar | 180 | $ 3.20 | $ 576.00 |
Corn syrup | 15 | $ 11.60 | $ 174.00 |
Salt | 72 | $ 2.90 | $ 208.80 |
Total | $ 2,622.80 | ||
Standard unit materials cost per pound | $ 1.38 |
[b]
Ingredient | Standard quanity | Actual Quantity | Difference | Standard price | Materials Quantity Variance | Favorable/Unfavorable |
Whole tomatoes | 3,200 | 3,300 | 100 | $ 0.52 | $ 52.00 | Unfavourable |
Vinegar | 180 | 173 | (7) | $ 3.20 | $ (22.40) | Favourable |
Corn syrup | 15 | 16 | 1 | $ 11.60 | $ 11.60 | Unfavourable |
Salt | 72 | 71 | (1) | $ 2.90 | $ (2.90) | Favourable |
Total direct materials quantity variance | $ 38.30 | Unfavourable |
Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,900...
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