Donohue Landscaping plants grass seed as the basic landscaping for business campuses. During a recent month the company worked on three projects (Macintosh, Chang, and Kahn). The company is interested in controlling the material costs, namely the grass seed, for these plantings projects.
In order to provide management with useful cost control information, the company uses standard costs and prepares monthly variance reports. Analysis reveals that the purchasing agent mistakenly purchased poor-quality seed for the Macintosh project. The Chang project, however, received higher-than-standard-quality seed that was on sale. The Kahn project received standard-quality seed; however, the price had increased and a new employee was used to spread the seed.
Shown below are quantity and cost data for each project.

Instructions
(a) Prepare a variance report for the purchasing department with the following columns:
(1) Project,
(2) Actual pounds purchased,
(3) Actual price,
(4) Standard price,
(5) Price variance, and
(6) Explanation.
(b) Prepare a variance report for the production department with the following columns:
(1) Project,
(2) Actual pounds,
(3) Standard pounds,
(4) Standard price,
(5) Quantity variance, and
(6)Explanation.

Transcribed Image Text:

Actual Standard Total Variance $ 25 U 65 F 100 U 60 U Project Macintosh Chang Kahn Quantit 500 lbs 400 500 Costs $1,175 960 1,300 SQuantity 460 lbs. Costs 1,150 1,025 1,200 410 480 Total variance