Standard Product Cost, Direct Materials Variance
Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,400 pounds) has the following standards:
Standard Quantity | Standard Price | |||
Whole tomatoes | 2,300 | lbs. | $ 0.54 | per lb. |
Vinegar | 130 | gal. | $ 3.30 | per gal. |
Corn syrup | 11 | gal. | $ 12.00 | per gal. |
Salt | 52 | lbs. | $ 3.00 | 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-111 were as follows:
2,400 lbs. of tomatoes |
125 gal. of vinegar |
12 gal. of corn syrup |
51 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 K-111. 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 | $ | |
Vinegar | $ | |
Corn syrup | $ | |
Salt | $ | |
Total direct materials quantity variance | $ |
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