Question

Standard Product Cost, Direct Materials Variance Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (2,600 pounds) has the following standards: Standard Quantity Standard Price Whole tomatoes 4,300 lbs. $ 0.38 per lb. Vinegar 240 gal. $ 2.30 per gal. Corn syrup 21 gal. $ 8.40 per gal. Salt 96 lbs. $ 2.10 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: 4,500 lbs. of tomatoes 230 gal. of vinegar 22 gal. of corn syrup 95 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 $ Unfavorable Vinegar $ Favorable Corn syrup $ Unfavorable Salt $ Favorable Total direct materials quantity variance $ Unfavorable

Answer 1

a	Ingredient	Standard Cost per Batch	Hint
	Whole tomatoes	$                        1,634.00	4,300 lbs.x $ 0.38 per lb.
	Vinegar	$                           552.00	240 gal. x $ 2.30 per gal.
	Corn syrup	$                           176.40	21 gal. x $ 8.40 per gal.
	Salt	$                           201.60	96 lbs. x $ 2.10 per lb.
	Total	$                        2,564.00
	Standard unit materials cost per pound	$                               0.99	(2564/2600)
b	Material Qty. Variance = (Actual qty. - Standard Qty)x Standard Price
	Ingredient	Materials Quantity Variance	Favorable/Unfavorable	Hint
	Whole tomatoes	76	Unfavorable	=(4500-4300)*0.38
	Vinegar	23	Favorable	=(240-230)*2.3
	Corn syrup	8.4	Unfavorable	=(22-21)*8.4
	Salt	2.1	Favorable	=(96-95)*2.1
	Total direct materials quantity variance	59.3	Unfavorable