Question

Standard Product Cost, Direct Materials VarianceCondiments Company uses standards to control its materials costs. Assume that a batch of ketchup (2,000 pounds) has the following standards:Standard Quantity Standard PriceWhole tomatoes 3,300 lbs. $ 0.39 per lb.Vinegar 190 gal. 2.40 per gal.Corn syrup 16 gal. 8.70 per gal.Salt 76 lbs. 2.20 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-54 were as follows:3,400 lbs. of tomatoes182 gal. of vinegar17 gal. of corn syrup75 lbs. of salta. Determine the standard unit materials cost per pound for a standard batch. If required, round amounts to the nearest cent.Ingredient Standard Cost per BatchWhole tomatoes $Vinegar $Corn syrup $Salt $Total $Standard unit materials cost per pound $b. Determine the direct materials quantity variance for batch K-54. 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/UnfavorableWhole tomatoes $ SelectFavorableUnfavorableItem 8Vinegar $ SelectFavorableUnfavorableItem 10Corn syrup $ SelectFavorableUnfavorableItem 12Salt $ SelectFavorableUnfavorableItem 14Total direct materials quantity variance $ SelectFavorableUnfavorableItem 16

Answer 1

Answer:

tomato     39 U

VINEGAR  19.2 F

CORN        8.7 U

SALT          2.2 F

TOTAL       26.3U

Material cost per pound: 1.0247‬

Explanation:

$(standard\:quantity-actual\:quantity) \times standard \: cost = DM \: quantity \: variance$

TOMATO

std quantity 3300.00

actual quantity 3400.00

std cost  $0.39

quantity variance  $(39.00)

$(3,300 - 3,400) \times 0.39 = DM \: quantity \: variance$

VINEGAR

std quantity 190.00

actual quantity 182.00

std cost  $2.40

$(190-182) \times 2.4 = DM \: quantity \: variance$

quantity variance  $19.20

CORN

std quantity 16.00

actual quantity 17.00

std cost  $8.70

$(16-17) \times 8.7 = DM \: quantity \: variance$

quantity variance  $(8.70)

SALT

std quantity 76.00

actual quantity 75.00

std cost  $2.20

$(76-75) \times 2.2 = DM \: quantity \: variance$

quantity variance  $2.20

material cost:

3,300 x   0.39    = 1,287

   190 x   2.4      =   456

     16 x   8.7       =   139.2

     76 x  2.2       =   167.2

total                     2,049.4

divided by 2,000 pounds:  1.0247‬