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 Costper 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 QuantityVariance |
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 Costper 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 QuantityVariance |
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 |

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