Question

Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (2,100 pounds) has the following standards:

	Standard Quantity		Standard Price
Whole tomatoes	3,500	lbs.	$ 0.36	per lb.
Vinegar	200	gal.	$ 2.20	per gal.
Corn syrup	17	gal.	$ 8.00	per gal.
Salt	80	lbs.	$ 2.00	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:

3,600 lbs. of tomatoes

192 gal. of vinegar

18 gal. of corn syrup

79 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	$

Answer 1

a. Determine the standard unit materials cost per pound for a standard batch. If required, round amounts to the nearest cent.

	Standard Cost per Batch
Whole tomatoes	3500*.36 = 1260
Vinegar	200*2.2 = 440
Corn syrup	17*8 = 136
Salt	80*2 = 160
Total	1996
Standard unit materials cost per pound	1996/2100 = 0.95

b.  Determine the direct materials quantity variance for batch K-111. If required, round amounts to the nearest cent.

	Material quantity variance	Favorable/Unfavorable
Whole tomatoes	(3500-3600)*.36 = 36	Unfavorable
Vinegar	(200-192)*2.20 = -17.60	Favorable
Corn syrup	(17-18)*8 = 8	Unfavorable
Salt	(80-79)*2 = -2	Favorable
Total direct materials quantity variance	24.40	Unfavorable