Question
Standard Product Cost, Direct Materials Variance Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,700 pounds) has the
Standard Product Cost, Direct Materials Variance
Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,700 pounds) has the following standards:
Standard Quantity | Standard Price | |||
Whole tomatoes | 2,800 | lbs. | $ 0.36 | per lb. |
Vinegar | 160 | gal. | $ 2.20 | per gal. |
Corn syrup | 14 | gal. | $ 8.00 | per gal. |
Salt | 64 | lbs. | $ 2.00 | 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 K-111 were as follows:
2,900 lbs. of tomatoes |
154 gal. of vinegar |
15 gal. of corn syrup |
63 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 The cost associated with the difference between the standard quantity and the actual quantity of direct materials used in producing a commodity.direct materials quantity variance for batch K-111. 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
|
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