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3 years ago

Standard Product Cost, Direct Materials Variance

Business

1 answer:

sdas [7]3 years ago

5 0

Answer:

A. $1.18

B. Whole tomatoes $90 Unfavorable

Vinegar ($24.30) Favorable

Corn syrup $10 Unfavorable

Salt ($2.50) Favorable

Total direct materials quantity variance $73.20 Unfavourable

Explanation:

a. Calculation to Determine the standard unit materials cost per pound for a standard batch.

Ingredient Standard quantity* Standard price= Standard Cost per Batch

Whole tomatoes 4,200 lbs.*$0.45 per lb=$1,890

Vinegar 230 gal.*$2.70 per gallon=$621

Corn syrup 20 gal.*$10.00 per gal=$200

Salt 92 lbs.* $2.50 per lb=$230

Total $2,941

Standard unit materials cost per pound=$2,941/$2,500 Standard unit materials cost per pound=$1.18

Therefore the standard unit materials cost per pound for a standard batch $1.18

[b] Calculation to determine the direct materials quantity variance for batch K-111

Ingredient Standard quantity-Actual Quantity =Difference* Standard price= Materials Quantity Variance Favorable/Unfavorable

Whole tomatoes 4,200 lbs -4,400 lbs=200 lbs*$0.45=$90 UNFAVORABLE

Vinegar 230 gal- 221 gal=(9gal)*$2.70=($24.30) FAVORABLE

Corn syrup 20 gal-21 gal=1gal*$10=$10 UNFAVORABLE

Salt 92 lbs-91 lbs=(1lbs)*$2.50=($2.50)FAVOURABLE

Total direct materials quantity variance $73.20 Unfavourable

($90-$24.30+$10-$2.50)

Therefore the direct materials quantity variance for batch K-111 will be:

Whole tomatoes $90 Unfavorable

Vinegar ($24.30) Favorable

Corn syrup $10 Unfavorable

Salt ($2.50) Favorable

Total direct materials quantity variance $73.20 Unfavourable

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