Question

Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,200 pounds) has the following standards: Standard Quantity Standard Price $ 0.52 per lb. Whole tomatoes 2,000 lbs. 110 gal. $3.20 per gal Vinegar $11.60 per gal. 9 gal Corn syrup $2.90 per lb. Salt 44 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: 2,100 lbs. of tomatoes 106 gal. of vinegar 10 gal. of corn syrup 43 lbs. of salt: 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 Ingredient Whole tomatoes Vinegar Corn syrup Salt Total Standard unit materials cost per pound

Answer 1

a.

Ingredient	Standard cost per Batch
Whole tomatoes (2000*$0.52)	$1,040
Vinegar (110*$3.20)	352
Corn syrup (9*$11.60)	104.4
Salt (44*$2.90)	127.6
Total	$1,624
Standard unit material cost per pound ($1,624/1,200)	$1.3533