9.4.5.11

Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (2,800 pounds) has the following standards:

	Standard Quantity		Standard Price
Whole tomatoes	4,700	lbs.	$0.37	per lb.
Vinegar	260	gal.	2.30	per gal.
Corn syrup	22	gal.	8.20	per gal.
Salt	104	lbs.	2.10	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 08-99 were as follows:

4,900 lbs. of tomatoes

250 gal. of vinegar

23 gal. of corn syrup

103 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 08-99. 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	$___	Unfavorable
Vinegar	____	Favorable
Corn syrup	____	Unfavorable
Salt	____	Favorable
Total direct materials quantity variance	$___	Unfavorable

c. The following data relate to labor cost for production of 3,200 cellular telephones:

Actual:	2,160 hrs. at $14.00
Standard:	2,130 hrs. at $14.30

Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Rate variance	$____	Favorable
Time variance	$____	Unfavorable
Total direct labor cost variance	$____	Favorable

d. Bellingham Company produces a product that requires 2.3 standard pounds per unit. The standard price is $3.20 per pound. 16,100 units used 36,800 pounds, which were purchased at $3.35 per pound.

What is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Round your answers to the nearest dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

a. Direct materials price variance	$____	Unfavorable
b. Direct materials quantity variance	$____	Favorable
c. Direct materials cost variance	$____	Unfavorable