Synthetic Manufacturing Co. manufactures the product Syntex, which requires three raw materials. Production is in batches of 2,500 pounds of materials. Any waste is thrown away. The firm uses standard costs as a control device. Its standard costs for materials are as follows:

During the month of July 2016, 25,000 pounds of Syntex were produced. There was no beginning or ending inventory of work in process. The materials actually used during July are listed below:
Material Quantity Total Cost
Plastic base.............22,100 lb.................$14,144
Tint........................1,150 lb......................230
Hardener..................2,050 lb...................1,353
INSTRUCTIONS
1. Compute the total variance between the actual cost of the materials used during July and the standard cost of the materials. Also compute the total variance for each type of material.
2. Analyze the variances for each type of material for the month.
Analyze:
Which raw materials were obtained at lower-than-standard unit costs?

Transcribed Image Text:

Standard Cost per Pound Standard Cost per Batch S1,430 Material Quantity Plastic base Tint Hardener Totals 2,200 lb. 100 lb. 200 lb 2,500 b. S0.65 0.22 0.65 130 S1,582