Summarizing materials costs, quantity and price variances, and materials variances. The Channing Plastics Company manufactures a product called Myrtilex, which requires three raw materials. Production is in batches of 2,000 pounds of materials. Waste (which is thrown away) sometimes occurs. Standard costs are used as a control device. The standard materials costs for each batch of Myrtilex have been established as given below.

The output is packaged in containers of 25 pounds each. During the month of February 19X1, 2,400 containers of Myrtilex were produced. There was no beginning or ending work in process inventory. The materials actually used during February were as follows:

Instructions 1. Prepare a summary of materials costs for the month of February (Exhibit 2).
Carry the unit costs to five decimal places and round to four places. Show whether the variances are favorable (F) or unfavorable (U).
2. Compute the quantity and price variances for each of the materials.
3. Prepare a materials variances summary for the month (Exhibit 3).
4. Give the general journal entry on February 28, 19X1, to charge the standard materials costs to production and to record the price and quantity variances.

Transcribed Image Text:

Standard Standard Material Quantity Cost per Pound Cost per Batch Plastic base 1,800 lb $.15 $270 Tint 100 lb .20 Hardener 100 lb .25 22 20 25 Total 2,000 lb $315