In: Accounting
Materials Variances
Manzana Company produces apple juice sold in gallons. Recently, the company adopted the following material standard for one gallon of its apple juice:
Direct materials 128 oz. @ $0.04 = $5.12
During the first week of operation, the company experienced the following results:
Required:
Note: Enter favorable values as negative numbers. Enter unfavorable values as positive numbers.
1. Compute the materials price variance.
$
Is it Favorable or Unfavorable?
2. Compute the materials usage variance.
$
Is it Favorable or Unfavorable?
3. During the second week, the materials usage
variance was $4,000 unfavorable and the materials price variance
was $20,000 unfavorable. The company purchased and used 2,300,000
ounces of material during this week. How many gallons of juice were
produced? If required, round your answer to nearest whole
value.
gallons
What was the actual price paid per ounce of materials? Round
your answer to the nearest cent.
$ per ounce