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. @ $0.03 = $3.84

During the first week of operation, the company experienced the following results:

1. Gallon units produced: 20,000.
2. Ounces of materials purchased and used: 2,730,000 ounces at $0.055.
3. 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. $68,250 Unfavorable

2. Compute the materials usage variance. $5,100 Unfavorable

3. During the second week, the materials usage variance was $4,000 unfavorable and the materials price variance was $20,000 unfavorable. The company purchased and used 2,120,000 ounces of material during this week. How many gallons of juice were produced? If required, round your answer to nearest whole value. _____ Gallons

What was the actual price paid per ounce of materials? Round your answer to the nearest cent. $0.04 per ounce