Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following data relate to the direct materials cost for the production of 2,500 automobile tires: Actual: 56,100 lbs. at $1.75 per lb. Standard: 54,400

The following data relate to the direct materials cost for the production of 2,500 automobile tires:

Actual: 56,100 lbs. at $1.75 per lb.
Standard: 54,400 lbs. at $1.7 per lb.

a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Materials Price Variance $
Direct Materials Quantity Variance $
Total Direct Materials Cost Variance $

b. The direct materials price variance should normally be reported to the . If lower amounts of direct materials had been used because of production efficiencies, the variance would be reported to the . If the favorable use of raw materials had been caused by the purchase of higher-quality raw materials, the variance should be reported to the .

Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,000 pounds) has the following standards:

Standard Quantity Standard Price
Whole tomatoes 1,700 lbs. $ 0.46 per lb.
Vinegar 90 gal. $ 2.80 per gal.
Corn syrup 8 gal. $ 10.20 per gal.
Salt 36 lbs. $ 2.60 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:

1,800 lbs. of tomatoes
86 gal. of vinegar
9 gal. of corn syrup
35 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 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 $
Vinegar $
Corn syrup $
Salt $
Total direct materials quantity variance $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance And Accounting For Business

Authors: Bob Ryan

1st Edition

9781861529930

Students also viewed these Accounting questions

Question

Define marginal costing?

Answered: 1 week ago

Question

How do rituals and routines express organizational values?

Answered: 1 week ago