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#7

Materials 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. @ $0.04 = $5.12 During the first week of operation, the company experienced the following results: a. Gallon units produced: 23,000. b. Ounces of materials purchased and used: 2,660,000 ounces at $0.060. C. No beginning or ending inventories of raw materials. Required: Note: Enter favorable values as negative numbers. Enter unfavorable values as positive numbers. 1. Compute the materials price variance. $ 53,200 Unfavorable 2. Compute the materials usage variance $ 11,360 X Favorable Materials and Labor Variances At the beginning of the year, Craig Company had the following standard cost sheet for one of its plastic products: Direct materials (5 lbs. @ $4.00) $20.00 Direct labor (2 hrs. @ $15.00) 30.00 Standard prime cost per unit $50.00 The actual results for the year are as follows: a. Units produced: 470,000. b. Materials purchased: 3,290,000 pounds @ $4.60. c. Materials used: 2,820,000 pounds. d. Direct labor: 846,000 hours @ $14.04. Required: 1. Compute price and usage variances for materials. Enter amounts as positive numbers and select Favorable or Unfavorable. Material price variance $ 1,974,000 Unfavorable Material usage variance $3,760,000 X Unfavorablev