Question

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.	$0.52	per lb.
Vinegar	90	gal.	3.20	per gal.
Corn syrup	8	gal.	11.60	per gal.
Salt	36	lbs.	2.90	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:

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 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
Whole tomatoes	$	Unfavorable
Vinegar		Favorable
Corn syrup		Unfavorable
Salt		Favorable
Total direct materials quantity variance	$	Unfavorable

Answer 1

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	1700*.52 = 884
Vinegar	90*3.2 = 288
Corn syrup	8*11.60 = 92.80
Salt	36*2.9 = 104.40
Total	$1369.20
Standard unit materials cost per pound	$1369.20/1000 = 1.37

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
Whole tomatoes	1700-1800*.52 = 52	Unfavorable
Vinegar	90-86*3.2 = -12.80	Favorable
Corn syrup	8-9*11.60 = 11.60	Unfavorable
Salt	36-35*2.9 = -2.9	Favorable
Total direct materials quantity variance	$47.90	Unfavorable