Question

**Please use numbers given** Please answer the blank boxes in (a) and (b) - thank you!! :)

Standard Product Cost, Direct Materials Variance Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (800 pounds) has the following standards: Whole tomatoes Vinegar Corn syrup Standard Quantity 1,300 lbs. 70 gal. 6 gal. Standard Price $0.36 per Ib. $ 2.20 per gal. $ 8.00 per gal. $ 2.00 per Ib. Salt 28 lbs. 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: 1,400 lbs. of tomatoes 67 gal. of vinegar 7 gal. of corn syrup 27 lbs. of salt

Answer 1

a) Calculate standard cost per batch

	Standard cost per batch
Whole tomatoes	468
Vinegar	154
Corn syrup	48
Salt	56
Total	726
Standard unit material cost per pound (726/800)	0.91

b) Material quantity variance

	Material quantity variance	Favorable/Unfavorable
Whole tomatoes	(1300-1400)*0.36 = 36	Unfavorable
Vinegar	(70-67)*2.2 = 6.60	Favorable
Corn syrup	(6-7)*8 = 8	Unfavorable
Salt	(28-27)*2 = 2	Favorable
Total direct material quantity variance	35.40	Unfavorable