Question

c

1. Standard Product Cost, Direct Materials Variance

   H.J. Heinz Company uses standards to control its materials costs. Assume that a batch of ketchup (7,650 pounds) has the following standards:

   	Standard Quantity		Standard Price
   Whole tomatoes	5,000	lbs.	$0.75	per lb.
   Vinegar	350	gal.	0.90	per gal.
   Corn syrup	40	gal.	7.50	per gal.
   Salt	125	lbs.	1.80	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 08-99 were as follows:

   4,900 lbs. of tomatoes

   375 gal. of vinegar

   36 gal. of corn syrup

   140 lbs. of salt

   a. Determine the standard unit materials cost per pound for a standard batch. Round the per unit answer to the nearest whole cent.

   Ingredient	Standard Cost per Batch
   Whole tomatoes	$fill in the blank 1
   Vinegar	fill in the blank 2
   Corn syrup	fill in the blank 3
   Salt	fill in the blank 4
   Total	$fill in the blank 5
   Standard unit materials cost per pound	$fill in the blank 6

   b.  Determine the direct materials quantity variance for batch 08-99. 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
   Tomatoes	$fill in the blank 7	Favorable
   Vinegar	fill in the blank 9	Unfavorable
   Corn syrup	fill in the blank 11	Favorable
   Salt	fill in the blank 13	Unfavorable
   Total direct materials quantity variance	$fill in the blank 15	Favorable

   Feedback

   Unfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit).

   The direct material cost variance is the difference between the actual and standard material cost.

   Remember the process discussed in chapter for calculating standard cost.

Check My Work1 more Check My Work uses remaining.

Answer 1