Question

Standard Product Cost, Direct Materials Variance

Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,600 pounds) has the following standards:

	Standard Quantity		Standard Price
Whole tomatoes	2,700	lbs.	$ 0.43	per lb.
Vinegar	150	gal.	2.6	per gal.
Corn syrup	13	gal.	9.6	per gal.
Salt	60	lbs.	2.4	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-54 were as follows:

2,800 lbs. of tomatoes

144 gal. of vinegar

14 gal. of corn syrup

59 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-54. 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