Question

Please answer both parts of question 1.

1A. Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,500 pounds) has the following standards:

	Standard Quantity		Standard Price
Whole tomatoes	2,500	lbs.	$ 0.49	per lb.
Vinegar	140	gal.	$ 3.00	per gal.
Corn syrup	12	gal.	$ 10.90	per gal.
Salt	56	lbs.	$ 2.70	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:

2,600 lbs. of tomatoes

134 gal. of vinegar

13 gal. of corn syrup

55 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	$

1B. The following data relate to labor cost for production of 5,900 cellular telephones:

Actual:	4,010 hrs. at $16.3
Standard:	3,950 hrs. at $16.6

a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Rate variance	$
Time variance	$
Total direct labor cost variance	$

b. The employees may have been less-experienced or poorly trained, thereby resulting in a   labor rate than planned. The lower level of experience or training may have resulted in   efficient performance. Thus, the actual time required was   than standard.

Answer 1

1A Condiments Company

a.

Ingredient	Standard Cost per Batch
Whole tomatoes (2500 x $0.49)	$1,225.00
Vinegar (140 x $3)	$420.00
Corn syrup (12 x $10.90)	$130.80
Salt (56 x $2.70)	$151.20
Total	$1,927.00
Standard unit materials cost per pound	$ 1.28

Standard unit materials cost per pound = $1927/1500 = $1.28

b. Materials quantity variance = Standard rate x (Actual quantity - Standard quantity)

Ingredient	Materials Quantity Variance	Favorable/Unfavorable
Whole tomatoes [$0.49 x (2600 - 2500)]	$49.00	Unfavorable
Vinegar [$3 x (134 - 140)]	$-18.00	Favorable
Corn syrup [$10.90 x (13 - 12)]	$10.90	Unfavorable
Salt [$2.70 x (55 - 56)	$-2.70	Favorable
Total direct materials quantity variance	$39.20	Unfavorable

1B.

a. Labor rate variance = Actual hours x (Actual rate - Standard rate) = 4010 x ($16.30 - $16.60) = $-1203 Favorable

Labor time variance = Standard rate x (Actual hours - Standard hours) = $16.60 x (4010 - 3950) = $996 Unfavorable

Total direct labor cost variance = $-207 Favorable

b. The employees may have been less-experienced or poorly trained, thereby resulting in a lower labor rate than planned. The lower level of experience or training may have resulted in less efficient performance. Thus, the actual time required was more than standard.

Please select appropriately from the given options since the same have not been provided with the question.